Which of the Following Tax Rules Applies to an Excess

question 31

Multiple Choice

Which of the following tax rules applies to an excess foreign tax credit (FTC) that arises in 2018?

• A) The excess FTC is first carried back to 2017 and any excess is carried forward for 10 years.
• B) The excess FTC is first carried back to 2016, then 2017, and any excess is carried forward for 20 years.
• C) The excess FTC is first carried back to 2015, then 2016, then 2017, and any excess is carried forward for 5 years.
• D) The excess FTC is carried forward 10 years, with no carryback allowed.

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Definitions:

Ethanol

A volatile, flammable, colorless liquid, commonly known as alcohol, used in beverages and as a solvent or fuel.

Complete Combustion

A chemical process in which a compound, usually a hydrocarbon, reacts fully with an abundant supply of oxygen to produce carbon dioxide, water, and energy.

Ethane Gas

A colorless, odorless gas that is the simplest alkane, with the formula C2H6, used as a fuel and a petrochemical feedstock.