Question

Isaac works for a domestic fruit importer and travels often to oversee company operations abroad. Isaac lived overseas to oversee operations in Israel for 2018 and passes all residency tests to be considered a foreign resident. Isaac owes $10,000 in USA Social security tax and Social Security taxes to Israel based on his 2018 income. In 2018 Isaac paid $9,000 of Social Security Tax to Israel in 2018 based on his income. What amounts can Isaac claim on his 2018 return on Form 1116 Foreign Income Tax Credit

Answer 1

$9,000.

Step-by-step explanation:

The Amount Isaac can claim on his 2018 return on Form 1116 Foreign Income Tax Credit is $9,000.

But taxpayers must pass the following four criteria in order to qualify to claim the foreign tax credit:

1. You must have incurred or paid a foreign tax liability.
2. The tax must be assessed on income.
3. The tax must be imposed on you as an individual.
4. The tax must have originated legally in a foreign country.