Which of the following foreign taxes is not creditable for U.S. tax purposes?
A)Direct taxes paid by a U.S. corporation on income earned in a foreign branch.
B)Income taxespaid to a foreign taxing authority on a dividend received by a U.S. corporation from its 100 percent owned foreign subsidiary.
C)Withholding taxes imposed on a dividend received by a U.S. corporation from its 100 percent owned foreign subsidiary.
D)All of these taxes are creditable.

Question

Quizplus · Accepted Answer

Withholding taxes imposed on dividends received by a U.S. corporation from its foreign subsidiary are not creditable for U.S. tax purposes. Direct taxes paid by a U.S. corporation on income earned in a foreign branch and income taxes paid to a foreign taxing authority on a dividend received by a U.S. corporation from its 100 percent owned foreign subsidiary are creditable.

Which of the Following Foreign Taxes Is Not Creditable for U.S