Mega, Inc, a U

question 75

Multiple Choice

Mega, Inc., a U.S. multinational, has pretax U.S. source income and foreign source income as follows. Mega paid $20,000 income tax to Country M. Mega has a $25,000 foreign tax credit carryforward. What is Mega's U.S. tax liability if it takes the foreign tax credit?

• A)$265,600
• B)$240,600
• C)$285,600
• D)$258,400

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Definitions:

Organization

The act of structuring or arranging parts or elements of something systematically for efficiency or clarity.

Interest

A charge for borrowed money, generally a percentage of the amount borrowed or the enthusiasm for or attention dedicated to a particular subject or activity.

Energy Level

The degree of vitality or physical and mental stamina an individual has available for activities.

Concentration

The action or power of focusing one's attention or mental effort on a specific object or activity.