foreign tax credit


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Foreign tax credit

Home country credit against domestic income tax. Received in return for foreign taxes paid on foreign derived earnings.

Foreign Tax Credit

A direct, dollar-for-dollar reduction in one's U.S. tax liability because of taxes levied by a foreign government. The United States is one of the only countries that taxes income that citizens earn abroad. However, the foreign tax credit exempts income paid as taxes to foreign governments, eliminating the possibility of double taxation.

foreign tax credit

The reduction in a U.S. tax liability because of taxes accrued or paid to a foreign government during the same taxable year.
References in periodicals archive ?
Tax relief through the foreign tax credit (or a foreign tax deduction) won't help, though, if you hold a foreign stock fund in a tax-deferred account such as an IRA.
FOGEI and FORI Foreign Tax Credit Limitation Examples
party is a person eligible to claim a foreign tax credit under IRC [section] 901(a), including a credit for taxes deemed paid under section 902 or 960, for all or a portion of foreign tax paid.
The foreign tax credit (FTC) is designed to prevent the double taxation of income that often results from international transactions.
The notice provides guidance on the application of the new look-through rules and the transition from the previous treatment The transition issues addressed include the carryover and carry-back of excess foreign tax credits and the treatment of separate limitation losses and overall foreign losses.
The practical alternative might be for taxpayers to plan around this roadblock when evaluating their foreign tax credit position and use strategies.
Corporations whose primary business was manufacturing accounted for the largest share of foreign income, tax, and foreign tax credit.
The IRS argues that allocations by foreign tax partnerships without corresponding income do not give rise to the double taxation that is the economic basis for the foreign tax credit, and that these types of allocations should not be allowed.
Financial statement prepares must then deal with the practical considerations associated with net operating loss, capital loss, minimum tax credit, and foreign tax credit carryovers.
9 million related to foreign tax credit carryforwards and approximately $1.
The IRS issued final regulations on determining the amount of taxes paid for purposes of the foreign tax credit (T.
Two important international tax concepts that have emerged over the years are the corporate foreign tax credit and controlled foreign corporations.

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