The U.S. IRS has published a practice unit, Overview – Expense Allocation/Apportionment in Calculation of the IRC 904 FTC Limitation. The general overview of the practice unit includes the following: The United States taxes a U.S. corporation's income on a worldwide basis. To prevent double taxation, U.S. taxpayers are allowed a credit for foreign income taxes paid/accrued. However, the amount of Foreign Tax Credit (FTC) a taxpayer can utilize each year is based upon the ratio of foreign source taxable income (FSTI) to worldwide taxable income (WWTI). Thus, the FTC is limited to the U.S. tax on FSTI. This is...