Mega, Inc, a U $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

Mega, Inc., a U.S. multinational, has pretax U.S. source income and foreign source income as follows.
Corporate tax rate schedule
U.S. source income $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 760,000
Foreign source income-Country M $\quad$$\quad$$\quad$ 80,000
Total $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $ 840,000
Mega paid $15,000 income tax to Country M. Mega has a $25,000 foreign tax credit carryforward. What is Mega's U.S. tax liability if it takes the foreign tax credit?

A) $16,800
B) $136,600
C) $176,600
D) $159,600

Correct Answer:

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