What is krebs allowable foreign tax credit

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Question - Krebs, Inc., a U.S. corporation, operates an unincorporated branch manufacturing operation in the U.K. Krebs, Inc., reports $900,000 of taxable income from the U.K. branch on its U.S. tax return, along with $1,600,000 of taxable income from its U.S. operations. The U.S. income and the U.K. branch income are all active business income. Krebs paid $270,000 in U.K. income taxes related to the $900,000 in branch income. Assuming a U.S. tax rate of 21%, what is Krebs' allowable foreign tax credit?

a. $189,000

b. $270,000

c. $605,000

d. $875,000

e. $315,000

Reference no: EM132190336

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