[Verse 1] When you earn income across the border line Two countries want to tax what should be mine The home country claims it all as theirs to take While source country taxes for revenue's sake This double burden needs a fair solution Foreign tax credits bring resolution [Chorus] Calculate and allocate, don't pay it twice Foreign tax credits are your best device Lesser of foreign tax or domestic rate On foreign income, let the credits relate F-T-C, the formula's key Avoid double tax, keep more money free [Verse 2] Start with foreign source income as your base Multiply by domestic tax you face Divide by total worldwide income earned That's the limit credit that you've learned But if foreign tax paid is less than this Take the smaller amount, you cannot miss [Chorus] Calculate and allocate, don't pay it twice Foreign tax credits are your best device Lesser of foreign tax or domestic rate On foreign income, let the credits relate F-T-C, the formula's key Avoid double tax, keep more money free [Bridge] Business income, investment gains Rental income, all the same Separate baskets, different rules Active and passive, use the right tools Carryback three, carryforward ten When credits exceed, use them again [Verse 3] Planning strategies help you optimize Treaty shopping isn't always wise Check-the-box elections change the game Foreign corporations lose their name Timing matters for the credit year When tax is paid, when income's here [Chorus] Calculate and allocate, don't pay it twice Foreign tax credits are your best device Lesser of foreign tax or domestic rate On foreign income, let the credits relate F-T-C, the formula's key Avoid double tax, keep more money free [Outro] From passive income to business gains Foreign tax credits break the chains Of double taxation's heavy cost Without them, too much wealth is lost
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