US Corporation Foreign Tax Credit

A US corporation has a 100% owned foreign corporation subsidiary in Germany.
The US Corporation has US source taxable income in the current year of $500,000, and authorizes a dividend of $140,000 from its German subsidiary.
The German corporation reports the following:
German source net income            $300,000
German income tax                        $(90,000)
Net income after tax                      $210,000

Assume the US Federal income tax on worldwide income is $250,000, and the German withholding tax is 10%.

Compute the corporation’s foreign tax credit after limitation, for the current year and any foreign tax carryover.

Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction....

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