Question

A taxpayer may be eligible to claim a foreign tax credit on taxes paid to a...

A taxpayer may be eligible to claim a foreign tax credit on taxes paid to a foreign country on income that is:

Choose one answer.

a. Taxed only on the U.S. return.
b. Taxed by a foreign country and the U.S.
c. Taxed only by a foreign country.
d. Nontaxable to the foreign country and the U.S
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Answer #1

A tax payer may be eligible to claim a foreign tax credit on the taxes paid to a foreign country on the income that is -

Taxed by the foreign country and the U.S

Foreign country includes foreign state and its political divisions . Income , war profit and excess profits taxed or accrued to the foreign provision or city qualifies for foreign tax credit

All qualified taxes paid to U.S possessions are considered for foreign tax credit .

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