ABC Inc a domestic corporation owns 100 of HighTax a
ABC, Inc., a domestic corporation, owns 100% of HighTax, a foreign corporation. HighTax has $50 million of undistributed E & P, all of which is attributable to general limitation income, and $30 million of foreign income taxes paid. HighTax distributes a $5 million dividend to ABC. The dividend, which is subject to a 5% foreign withholding tax, is ABC's only item of income during the year. ABC's marginal U.S. tax rate is 35%. How much foreign tax credit and carryover is produced by the dividend?
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