What advantages does a cash method taxpayer gain by electing to accrue foreign t

Question

What advantages does a cash method taxpayer gain by electing to accrue foreign taxes for foreign tax credit? purposes?

A. By electing to accrue their income? taxes, it may prevent taxpayers from losing foreign tax credits because of timing differences between the year in which the income is reported for U.S. tax purposes and the year when the foreign taxes are paid to the foreign government.

B. By electing to accrue their income? taxes, this can accelerate the claiming of a tax credit for their tax payments from the year in which a payment is made to the year in which the income is subject to U.S. taxation.

C. If an election to accrue income taxes is? made, most income items will not change the year in which the related foreign tax credit is claimed.? Whereas, for some income? items, this election will obviate the need to carryback or carryover foreign tax credits from one tax year to another.

D. All of the above.

Explanation / Answer

Answer:D. All of the above.

Explanation:

All the of the above three statements were advantageious to the tax payer by electing to accrue foreign taxes for foreign tax credit purpose.

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