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

Exercise 62

Mackinac Corporation, a U..corporation, reported total taxable income of $5 million in 2011.Taxable income included $1. million of foreign source taxable income from the company's branch operations in Canada.All of the branch income is general category income.Mackinac paid Canadian income taxes of $600,000 on its branch income.Compute Mackinac's allowable foreign tax credit for 2011.Assume a U..corporate tax rate of 34%.