McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 46

Euro Corporation, a U.S. corporation, operates through a branch in Germany. During 2011 the branch reported taxable income of $1,000,000 and paid German income taxes of $300,000. In addition, Shamrock received $50,000 of dividends from its 5% investment in the stock of Maple Leaf Company, a Canadian corporation. The dividend was subject to a withholding tax of $5,000. Euro reported U.S. taxable income from its manufacturing operations of $950,000. Total taxable income was $2,000,000. Precredit U.S. taxes on the taxable income were $680,000. Included in the computation of Euro's taxable income were "definitely allocable" expenses of $500,000, 50% of which were related to the German branch taxable income.
Complete pages 1 and 2 of Form 1118 for just the general category income reported by Euro. You can use the "fill-in" form available on the IRS website, http://www.irs.gov.