Euro Corporation, a U.S. corporation, operates through a branch in Germany. During 2022, the branch reported...

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Euro Corporation, a U.S. corporation, operates through a branch in Germany. During 2022, the branch reported taxable income of $1,900,000 and paid German Income taxes of $570,000. In addition, Euro received $59,000 of dividends from its 5 percent Investment in the stock of Maple Leaf Company, a Canadian corporation. The dividend was subject to a withholding tax of $5.900. Euro reported U.S. taxable income from Its manufacturing operations of $1,841,000. Total taxable income was $3,800,000. Pre-credit U.S. taxes on the taxable income were $798.000. Included in the computation of Euro's taxable income were "definitely allocable" expenses of $950,000, 50 percent of which were related to the German branch taxable income. Complete pages 1 and 2 of Form 1118 for just the foreign branch Income reported by Euro. Note: Use 2022 tax rules regardless of year on tax form. Prepare Form 1118. 1118 PG1 Page 1 of Form 1118. Form 1118 (Rev. December 2021) Department of the Treasury Internal Revenue Service For calendar year 20 Name of corporation A B C 1118 PG2 Use a separate Form 1118 for each applicable category of income (see instructions) Separate Category (Enter code-see instructions.) a A Totals (add lines A through C) B C Totals 1. EIN or Reference ID Number (0 Instructions) It code 901) is entered on ane a, enter the country code for the sanctioned country (sas instructions) one of the RBT codes is entered on line a enter the country code for the treaty country (see instructions) Schedule A 6. Gross Rants, Royalties, and License Fees (a) Dividends Received Deduction (500 instructions) 2. Foreign Country or U.S. Possession (enter two-letter code-use a separate line for nach) (500 instructions) Foreign Tax Credit-Corporation Attach to the corporation's tax return. ►Go to www.irs.gov/Form1118 for Instructions and the latest information. 7. Sales (b) Deduction Allowed Under Section 250(a) (1)(A) Foreign Derived Intangible Income or other tax year beginning 3. Inclusions Under Sections 951(a)(1) and 951A (see instructions) (a) Exclude (b) Grass-Up (section Gross-Up 78) 8. Grass Income From Performance of Services Income or (Locc) Before Adjustments (Report all amounts in U.8. dollars. See apsolfio instructions.) Gross Income or (Loss) From Bouroes Outside the United State (c) Deduction Allowed Under Section 250(a) (1)(B)-Global Intangible Low- Taxed Income 20 9. Currency Gain (d) Depreciation, Depletion, and Amortization 4. Dividends (see instructions) 10. Currency Gain Code (see instructions 13. Allocable Deductions Rental Royalty, and Licensing Expenses and anding (e) Cher Allocable Expenses Employer Identification number 11. Other (attach schedule) OMB No. 1545- 0123 Attachment Sequence No. 118 (1) Expenses Allocable to Sales Income 5. Interest 12. Total (add columns 3(4) through 9 and 11) 0 (g) Expenses Allocable to Gross income From Performance of Service A B C Totals A BC B C (a) Dividends Received Deduction (500 instructions) (h) Currency Loss (b) Deduction Allowed Under Section 250(4) (1XA) Foreign Derived Intangible Income (1) Currency Loss Code (c) Deduction Allowed Under Section 250(a) (1)(B)-Global Intangible Low- Taxed Income 13. Allocable Deductions (continued) () Other Alocable Deductions (attach schedule) (son instructions) (500 instructions) Rental, Royalty, and Licensing Expenses (d) Depreciation, Depletion, and Amortization (k) Total Allocable Deductions (add columns 13(a) through 13th) and 13(1) 0 (0) Other Allocable Expenses 14. Apportioned Share of Deductions (enter amount from applicable line of Schedule H, Part 1, column (b), and Schedule H, Part II, column (d)} (T) Expenses Allocable to Sales Income Cat No. 10900F 15. Not Operating Loss Deduction 16. Total Deductions (add columns 13(k) through 15) 0 (9) Expenses Allocable to Gross Income From Performance of Service 17. Total Income or (Loss) Before Adjustments (subtract column 16 from column 12) 0 Totals "For section 863(b) income, NOLS, income from RICS, high-taxed income, section 951A, and reattribution of income by reason of disregarded payments, use a single ine (see instructions). Also, for reporting branches that are OBUS, use a separate fine for each such branch. Form 1118 (Rev. 12-2021) Form 1118 (Rev. 12-2021) Bohedule Parti-Foreign Taxes Pald, Acorued, and Deemed Pald (see instructions) 1. Creatis Cined for Taxe (check on) A B C A B C Totals Totals (add ines Athrough C) S 2 3 5 7 C 9 10 Faid 12 13 Date Pa 14 Foreign Tax Credit (Report all foreign tax amounts in U. 8. dollars.) Accrua Data Acced Part-Separate Foreign Tax Credit (Complete a separate Part for each applicable category of income.) Total forgs taxes paid or actruad total from Part 1, column 201 14 Foreign taxas paid or accrued by the corporation during prior tax years that were suspended due to the rules of section and for which thered income is taken into account by the corporation during the current tax year(se instructions) 2. Foreign Taxes Paid or Accrued amach schedule showing amounts in foreign currency and conversion rate(s) used) Tax Winned at Source on (4) Divid (b) Distributors of Previously Taxed Earings and Profes c) Branch Romances Adjustments to Ina Ba(se instructions) Subtracting from ine Sa 2. Foreign Taxes Paid or Accrued (atach schedule showing amounts in foreign currency and conversion rateta) used) (continued) Other Foreign Taxes Paid or Actrued on Total Foreign Taxos Paid or Accrued (add columns 2(a) through 201 (0) Sales thi Services income (Other (4) interest Totalt med paid total from Part 1 column 3) Reductions of taxes paid accrued, or deemed paid jenter soal from Schedule. Part Taxes reclassified under high-tax kickout Enter the sum of any canyover of foreign taxes (from Schedule K, line 3, column (xv), and from Schadula L, Part, line 3) plus any carrybacks to the curent year Total foreign taxes combine inesta through St tb 2 3 4 1 (a) Rents, Roysties, and License Fees Enter the amount from the applicable column of Schedula J, Part 1, ine 11 (see instructions. If Schedule is not required to be completed, enter the result from the "Tilaisina of column 17 of the applicable Schule A Total tax income from at sources jenter taxable income to the corporation's tax return) Divide line 7 by Ine Sc Enter the resulting traction as a decimal ses instructions). If Ine 7 is greater than line Santer 1 Total U.S. income tax against which credit is allowed regular tax ability (see section 26/01) minus any American Samos economic development creat) Multiply line 9 by line 10 Increase in limitation section ( Cramation(add lines 11 and 121 1500 instructions Separate foreign tax creat (enter the smaller of line 6 or line 13) Enter here and on the appropriate ine of Part III Bs 3. Tax Deemed Paid (see instructions 10 Page 2 15 12 th Other 13 14 Form 1118 (Rev 12-2021) Euro Corporation, a U.S. corporation, operates through a branch in Germany. During 2022, the branch reported taxable income of $1,900,000 and paid German Income taxes of $570,000. In addition, Euro received $59,000 of dividends from its 5 percent Investment in the stock of Maple Leaf Company, a Canadian corporation. The dividend was subject to a withholding tax of $5.900. Euro reported U.S. taxable income from Its manufacturing operations of $1,841,000. Total taxable income was $3,800,000. Pre-credit U.S. taxes on the taxable income were $798.000. Included in the computation of Euro's taxable income were "definitely allocable" expenses of $950,000, 50 percent of which were related to the German branch taxable income. Complete pages 1 and 2 of Form 1118 for just the foreign branch Income reported by Euro. Note: Use 2022 tax rules regardless of year on tax form. Prepare Form 1118. 1118 PG1 Page 1 of Form 1118. Form 1118 (Rev. December 2021) Department of the Treasury Internal Revenue Service For calendar year 20 Name of corporation A B C 1118 PG2 Use a separate Form 1118 for each applicable category of income (see instructions) Separate Category (Enter code-see instructions.) a A Totals (add lines A through C) B C Totals 1. EIN or Reference ID Number (0 Instructions) It code 901) is entered on ane a, enter the country code for the sanctioned country (sas instructions) one of the RBT codes is entered on line a enter the country code for the treaty country (see instructions) Schedule A 6. Gross Rants, Royalties, and License Fees (a) Dividends Received Deduction (500 instructions) 2. Foreign Country or U.S. Possession (enter two-letter code-use a separate line for nach) (500 instructions) Foreign Tax Credit-Corporation Attach to the corporation's tax return. ►Go to www.irs.gov/Form1118 for Instructions and the latest information. 7. Sales (b) Deduction Allowed Under Section 250(a) (1)(A) Foreign Derived Intangible Income or other tax year beginning 3. Inclusions Under Sections 951(a)(1) and 951A (see instructions) (a) Exclude (b) Grass-Up (section Gross-Up 78) 8. Grass Income From Performance of Services Income or (Locc) Before Adjustments (Report all amounts in U.8. dollars. See apsolfio instructions.) Gross Income or (Loss) From Bouroes Outside the United State (c) Deduction Allowed Under Section 250(a) (1)(B)-Global Intangible Low- Taxed Income 20 9. Currency Gain (d) Depreciation, Depletion, and Amortization 4. Dividends (see instructions) 10. Currency Gain Code (see instructions 13. Allocable Deductions Rental Royalty, and Licensing Expenses and anding (e) Cher Allocable Expenses Employer Identification number 11. Other (attach schedule) OMB No. 1545- 0123 Attachment Sequence No. 118 (1) Expenses Allocable to Sales Income 5. Interest 12. Total (add columns 3(4) through 9 and 11) 0 (g) Expenses Allocable to Gross income From Performance of Service A B C Totals A BC B C (a) Dividends Received Deduction (500 instructions) (h) Currency Loss (b) Deduction Allowed Under Section 250(4) (1XA) Foreign Derived Intangible Income (1) Currency Loss Code (c) Deduction Allowed Under Section 250(a) (1)(B)-Global Intangible Low- Taxed Income 13. Allocable Deductions (continued) () Other Alocable Deductions (attach schedule) (son instructions) (500 instructions) Rental, Royalty, and Licensing Expenses (d) Depreciation, Depletion, and Amortization (k) Total Allocable Deductions (add columns 13(a) through 13th) and 13(1) 0 (0) Other Allocable Expenses 14. Apportioned Share of Deductions (enter amount from applicable line of Schedule H, Part 1, column (b), and Schedule H, Part II, column (d)} (T) Expenses Allocable to Sales Income Cat No. 10900F 15. Not Operating Loss Deduction 16. Total Deductions (add columns 13(k) through 15) 0 (9) Expenses Allocable to Gross Income From Performance of Service 17. Total Income or (Loss) Before Adjustments (subtract column 16 from column 12) 0 Totals "For section 863(b) income, NOLS, income from RICS, high-taxed income, section 951A, and reattribution of income by reason of disregarded payments, use a single ine (see instructions). Also, for reporting branches that are OBUS, use a separate fine for each such branch. Form 1118 (Rev. 12-2021) Form 1118 (Rev. 12-2021) Bohedule Parti-Foreign Taxes Pald, Acorued, and Deemed Pald (see instructions) 1. Creatis Cined for Taxe (check on) A B C A B C Totals Totals (add ines Athrough C) S 2 3 5 7 C 9 10 Faid 12 13 Date Pa 14 Foreign Tax Credit (Report all foreign tax amounts in U. 8. dollars.) Accrua Data Acced Part-Separate Foreign Tax Credit (Complete a separate Part for each applicable category of income.) Total forgs taxes paid or actruad total from Part 1, column 201 14 Foreign taxas paid or accrued by the corporation during prior tax years that were suspended due to the rules of section and for which thered income is taken into account by the corporation during the current tax year(se instructions) 2. Foreign Taxes Paid or Accrued amach schedule showing amounts in foreign currency and conversion rate(s) used) Tax Winned at Source on (4) Divid (b) Distributors of Previously Taxed Earings and Profes c) Branch Romances Adjustments to Ina Ba(se instructions) Subtracting from ine Sa 2. Foreign Taxes Paid or Accrued (atach schedule showing amounts in foreign currency and conversion rateta) used) (continued) Other Foreign Taxes Paid or Actrued on Total Foreign Taxos Paid or Accrued (add columns 2(a) through 201 (0) Sales thi Services income (Other (4) interest Totalt med paid total from Part 1 column 3) Reductions of taxes paid accrued, or deemed paid jenter soal from Schedule. Part Taxes reclassified under high-tax kickout Enter the sum of any canyover of foreign taxes (from Schedule K, line 3, column (xv), and from Schadula L, Part, line 3) plus any carrybacks to the curent year Total foreign taxes combine inesta through St tb 2 3 4 1 (a) Rents, Roysties, and License Fees Enter the amount from the applicable column of Schedula J, Part 1, ine 11 (see instructions. If Schedule is not required to be completed, enter the result from the "Tilaisina of column 17 of the applicable Schule A Total tax income from at sources jenter taxable income to the corporation's tax return) Divide line 7 by Ine Sc Enter the resulting traction as a decimal ses instructions). If Ine 7 is greater than line Santer 1 Total U.S. income tax against which credit is allowed regular tax ability (see section 26/01) minus any American Samos economic development creat) Multiply line 9 by line 10 Increase in limitation section ( Cramation(add lines 11 and 121 1500 instructions Separate foreign tax creat (enter the smaller of line 6 or line 13) Enter here and on the appropriate ine of Part III Bs 3. Tax Deemed Paid (see instructions 10 Page 2 15 12 th Other 13 14 Form 1118 (Rev 12-2021)

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Page 1 is the same Page 2 Schedule A Page 2 1a Gross income from German branch 1900000 1b 1c 1d ... View the full answer