Alan, a US

Multiple Choice

Alan, a U.S. citizen, works in Germany and earns $70,000, paying $20,000 in German taxes. His U.S. income is $40,000 and he pays $8,000 in U.S. taxes. His U.S. taxes on his worldwide income are $22,500. What is Alan's foreign tax credit? Assume he does not qualify for the foreign- earned income exclusion.

A) $20,000
B) $12,000
C) $14,318
D) none of the above