Fulbright grant received by Mr. Jones in nonconvertible foreign currency | $8,000 |
Dividends received by Mr. Jones entitled to dividends-received credit | 500 |
Compensation for personal services of Mrs. Jones | 3,000 |
Net profit from business carried on by Mrs. Jones | 2,500 |
Total adjusted gross income | 14,000 |
Deduction for personal exemptions | $3,000 |
Charitable contributions | 500 |
Interest expense | 400 |
Taxes | 300 |
Total allowable deductions | 4,200 |
Foreign tax credit for foreign taxes paid on Fulbright grant | $300.00 | |
Dividends-received credit | 20.00 | |
Credit for income tax withheld upon compensation of Mrs. Jones | 304.80 | |
Payments of estimated tax (see § 301.6316-6(b)(2) for determination of amounts): | ||
U.S. dollars | $426.32 | |
Foreign currency | 893.88 | 1,320.20 |
Total allowable credits and payments | 1,945.00 |
Adjusted gross income | $14,000.00 | |
Less: Allowable deductions | 4,200.00 | |
Taxable income | 9,800.00 | |
Tax computed under section 2 | 2,148.00 | |
Ratio of adjusted gross income received in nonconvertible foreign currency to entire adjusted gross income ($8,000 ÷ $14,000) (percent) | 57.14 | |
Portion of tax attributable to nonconvertible foreign currency ($2,148 * 57.14 percent) | $1,227.37 | |
Less: | ||
Credit for foreign taxes paid on Fulbright grant | $300.00 | |
Payment in foreign currency of estimated tax | 893.88 | 1,193.88 |
Portion of tax attributable to amounts received in nonconvertible foreign currency | 83.49 |
26 C.F.R. §301.6316-3