Information for year 1, year 2, and year 3 for a foreign branch of MJG, Inc. is presented in the following table. The corporate tax rate in the foreign country in year 1 was 11%.In year 2, the rate increased to 15%and in year the rate increased to 22%. The US tax rate was 21 percent in each year.

	Year 1	Year 2	Year 3
Foreign source income	$75,000	$100,000	$100,000
Foreign taxes paid	8,250	15,000	22,000
US tax before FTC	15,750	21,000	21,000

1. Calculate the foreign tax credit for each year allowed in the United States
2. Calculate the US tax liability for each year
3. Calculate any carry back of excess foreign tax credit

Answer rating: 100% (QA)

1 Calculate the foreign tax credit for each year allowed in the United States The foreign tax credit FTC is calculated based on the foreign taxes paid ... View the full answer