Foreign Tax Credit, part 2

Описание: Foreign Tax Credit, Part 2
Learn more about the credit allowed against U.S. income tax for foreign income taxes. This part covers:

Time Topic
00:00 Title sequence
00:10 Who gets the credit
00:51 Taxes paid or accrued
02:32 Translating foreign tax to U.S. dollars
04:58 Redeterminations
06:54 Quiz and closing

Quiz:
1. I receive two payments from UK Ltd. in 2014, and UK tax is withheld as follows: £500 on 3/31/14 and £500 on 9/30/14. How much is my foreign tax eligible for credit?
a. $1,582
b. $1,000
c. $1,648
d. Some other different amount
2. US Inc. accrued € of France tax in its calendar tax year 2015. It properly translated that as $10,500 and used the full credit. The France government sends US Inc. a notice in 2017 decreasing the tax to €9,000 and sends a check worth $850. Which must US Inc. do:
a. File an amended return and pay $850.
b. File an amended return and pay $1,050.
c. Notify the IRS and wait for assessment.
3. Must US Inc. pay the IRS any interest with the above tax?
a. Yes
b. No.

Resources:
Law:
26 USC 901: http://uscode.house.gov/view.xhtml?re...
26 USC 905(c): http://uscode.house.gov/view.xhtml?re...
26 USC 986: http://uscode.house.gov/view.xhtml?re...

Fixed and determinable: 26 CFR 1.461-1(a) https://www.ecfr.gov/cgi-bin/text-idx...

Forms:
Individual: Form 1116 https://www.irs.gov/pub/irs-pdf/f1116...
Corporation: Form 1118 https://www.irs.gov/pub/irs-pdf/f1118...

Publication 514: Foreign Tax Credit for Individuals https://www.irs.gov/pub/irs-pdf/p514.pdf

Exchange Rates: https://www.irs.gov/individuals/inter...

Quiz answers:
1. a. (if cash method, likely for individuals) (c. if accrual method); 2.a.; 3.b.