Sparks, Inc. $($Sparks$),$ a U$.$S$.$ C$-$Corporation with a calendar year end, manufactures sporting goods at its plant in East Lansing, Michigan, as well as sources sporting goods manufactured by third$-$parties for resale.$$ Sparks is known for its innovative and extensive research and experimental $($R&E$)$ activities, which are conducted in a separate facility in Ann Arbor, Michigan.$$ As a result of these R&E activities, Sparks has a significant number of inventions that have been patented in the United States and other industrialized countries, including Japan.$$ On January $1,2024,$ Sparks established a branch office in the United Kingdom $($UK$)$ to handle marketing, sales, and distribution of sporting goods sold throughout Europe.$$ All the taxable income of the UK branch is foreign$-$source income.$$ Prior to calendar year $2024,$ Sparks had no foreign$-$source income $($or loss$).$ Sparks$$s results for calendar year $2024$ were as follows: $1.$ The UK branch office generated foreign$-$source income and UK taxable income of $$2,000,000,$ on which it paid UK income tax of $$300,000$ i$.$e$.,$ a flat UK income tax rate of $15$ percent. $2.$ For U$.$S$.$ tax purposes, Sparks had worldwide deductible interest expense for the calendar year of $$3,000,000.$ Sparks$$s worldwide assets had an adjusted tax book basis of $$100,000,000,$ of which assets having an adjusted tax book basis of $$10,000,000$ are associated with the UK foreign$-$source income. The interest expense f $$3$M needs to be apportioned between foreign$-$source and U$.$S$.-$source. Note: the foreign$-$source taxable income of $$2$M has not yet been adjusted for the foreign$-$source interest expense. $3.$ For U$.$S$.$ tax purposes, in addition to the interest expense, Sparks allocated and apportioned $$30,000$ of deductible selling, general, and administrative $($SGA$)$ expenses and $$70,000$ of deductible R&E expenditures against its UK foreign$-$source income for foreign tax credit limitation purposes. Again, the UK taxable income of $$2$M has not yet been adjusted for these expenses. $4.$ Sparks had $$25,000,000$ of worldwide taxable income after deducting the interest expense, SGA, and R&E expenses noted in bullet points $2$ and $3.$ Assume a flat U$.$S$.$ corporate income tax rate of $21$ percent. $($a$.)$ Compute Sparks net foreign$-$source taxable income for $2024.(2$ points$)($b$.)$ How much foreign tax credit will Sparks be allowed to claim on its $2024$ U$.$S$.$ corporate income tax return?$$ Compute Sparks$$s U$.$S$.$ excess credit $($excess limitation$)$ for $2024.$ Show your calculations. $(2$ points$)($c$.)$ In addition to the above facts: $(1)$ On January $1,2024,$ Sparks granted a non$-$exclusive license covering foreign patents on its sporting goods to an unrelated company organized under the laws of Japan, whereby the unrelated Japanese company was permitted to manufacture, sell, and distribute sporting goods in Japan; $(2)$ Sparks had received royalty income from the unrelated Japanese licensee of $$500,000,$ which were subject to a Japanese royalty withholding tax of ten percent $(10\%)$ i$.$e$.,$ $$50,000.$ For purposes of this question, assume that no deductible U$.$S$.-$based expenses $($e$.$g$.,$ interest, SGA, R&E$)$ would be allocated and apportioned against this royalty income. Re$-$compute Sparks$$s foreign tax credit and excess credit $($limitation$)$ for each basket. $($Hint: Foreign income separate basket limitation applies here$)[2$ points$]$