Elmo Inc. is a U.S corporation with a branch in foreign country Z. Elmo Inc. had the following taxable income and paid $28,000 of country Z income tax"

FTC Limitation= US tax x foreign source income/ worldwide income

U.S. source income $340,000

Forgein source income $60,000

Total $400,000

1) Calculate Elmo Inc.'s U.S. tax liability before foreign tax credit, FTC limitation, and U.S tax liability after foreign tax credit.

2) If Elmo, Inc. paid only $10,000 of country Z tax, calculate Elmo's foreign tax credit allowable and net U.S tax liability after foreign tax credit.