Bismarck Corporation Has a Precredit U

Multiple Choice

Bismarck Corporation has a precredit U.S. tax of $340,000 on $1,000,000 of taxable income in 2014. Bismarck has $200,000 of foreign source taxable income characterized as general category income and $50,000 of foreign source taxable income characterized as passive category income. Bismarck paid $80,000 of foreign income taxes on the general category income and $10,000 of foreign income taxes on the passive category income. What amount of foreign tax credit (FTC) can Bismarck use on its 2014 U.S. tax return and what is the amount of the carryforward, if any?

A) $90,000 FTC with $0 carryforward
B) $85,000 FTC with $5,000 carryforward
C) $78,000 FTC with $12,000 carryforward
D) $78,000 FTC with $5,000 carryforward