Question

Pierre Corporation has a precredit U.S. tax of $315,000 on $1,560,000 of taxable income in the current year. Pierre has $312,000 of foreign source taxable income characterized as foreign branch income and $156,000 of foreign source taxable income characterized as passive category income. Pierre paid $63,000 of foreign income taxes on the foreign branch income and $27,000 of foreign income taxes on the passive category income. What amount of foreign tax credit (FTC) can Pierre use on its current U.S. tax return and what is the amount of the carryforward, if any

Answer 1

the carryforward amount is $90,000

Step-by-step explanation:

The computation of the carryforward amount is given below:

= Foreign income tax paid on the foreign branch income + foreign income taxes on the passive category income

= $63,000 + $27,000

= $90,000

hence, the carryforward amount is $90,000