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Deductions & credits
The foreign tax credit in any year is limited to a pro rata share of taxes paid on foreign income. Therefore, if your effective tax rate on all income (taxes owed/ taxable income) is less than the tax rate paid on your foreign income (foreign taxes paid /foreign income(also adjusted for a pro rata share of deductions ) your foreign tax credit will be limited to the the effective rate on all income times your foreign adjusted income.
‎April 12, 2024
10:44 AM