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Question: Petro Corporation is a U.S. corporation


Petro Corporation is a U.S. corporation with operations in several foreign countries as well as in the United States. During the current year, Petro’s worldwide taxable income is $600,000. Petro’s foreign source income is $180,000, on which it pays $45,000 in foreign taxes.
a. What is Petro’s foreign tax credit?
b. What is Petro’s foreign tax credit if it pays $75,000 in foreign taxes?


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