Jim has foreign income. He earns $26,000 from Country A which taxes the income at a 20

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Question:

Jim has foreign income. He earns $26,000 from Country A which taxes the income at a 20 percent rate. He also has income from Country B of $18,000. Country B taxes the $18,000 at a 10 percent rate. His U.S. taxable income is $90,000, which includes the foreign income. His U.S. income tax on all sources of income before credits is $19,000. What is his foreign tax credit?

a. $7,000

b. $9,289

c. $19,000

d. Jim does not qualify for a foreign tax credit.

e. $6,500