Quote:Is that how it works? I thought the deduction comes off of their profits, not their tax bill. That's similar to the difference between a mortgage interest deduction vs. a child tax credit. In the former case it lowers your taxes, but not by 100%, just the additional taxes you'd pay on the income that went to mortgage interest.

 

The foreign tax credit does reduce your liability dollar for dollar.  Any dollar you spend on foreign taxes will reduce your tax owed to the IRS by the same amount.  Mortgage interest is an itemized deduction so it only has potential to reduce your taxable income.  The FTC or CTC (credits) actually reduce the total tax.  However, like I said, I dont think that is the issue at hand here.  Apple should not be getting a FTC on income they dont report in the US.

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