Solution-What will be sombrero excess foreign tax credit

What will be sombrero excess foreign tax credit

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Question - Sombrero Corporation, a U.S. Corporation, operates through a branch in Espania. Management projects that the company's pretax income in the next taxable year will be $113,400: $88,400 from US. operations and $25,000 from the Espania branch. Espania taxes corporate income at a rate of 30 percent.

a. If management's projections are accurate, what will be Sombrero's excess foreign tax credit in the next taxable year? Assume all of the income is foreign branch income.

b. Management plans to establish a second branch in |talia. Italia taxes corporate income at a rate 0110 percent. What amount of income will the branch in Italia have to generate to eliminate the excess credit generated by the branch in Espania?

Reference no: EM133164783

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What will be sombrero excess foreign tax credit

Reference no: EM133164783

Reference no: EM133164783

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