Problem $7-21($Algorithmic$)$

Foreign Exclusion and Tax Credit $($LO $7\mathrm{.}6)$

Martha and Lew are married taxpayers with $$550$ of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim $1$ full $$550$ as a foreign tax credit. Their tax bracket is $15$ percent and they itemize deductions.

Should they claim the foreign tax credit or a deduction for foreign taxes on their Schedule A$?$

If required, round your answer to the nearest dollar.

The foreign tax deduction will result in a $ $$ tax benefit where as claiming the foreign tax credit yields a $ $$ tax benefit. Therefore, the taxpayers should