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foreign country or to any possession of the United States", plus
those taxes deemed to have been paid under sections 902 and 960.
Sec. 901(a) and (b)(1). The purpose of section 901 is to provide
relief from U.S. taxation where income already has been taxed by
another country. Perkin-Elmer Corp. & Subs. v. Commissioner, 103
T.C. 464, 470 (1994). Section 904(a) provides that the amount of
the foreign tax credit "shall not exceed the same proportion of
the tax against which such credit is taken which the taxpayer's
taxable income from sources without the United States * * * bears
to his entire taxable income for the same taxable year." This
limitation was enacted to prevent foreign tax credits from
eliminating U.S. tax on U.S.-source income. Perkin-Elmer Corp. &
Subs. v. Commissioner, supra at 470-471. Section 904(c) provides
for carryback and carryover of any excess foreign taxes as
follows:
(c) Carryback and Carryover of Excess Tax Paid.--
Any amount by which all taxes paid or accrued to
foreign countries or possessions of the United States
for any taxable year for which the taxpayer chooses to
have the benefits of this subpart exceed the limitation
under subsection (a) shall be deemed taxes paid or
accrued to foreign countries * * * in the second
preceding taxable year, in the first preceding taxable
year, and in the first, second, third, fourth, or fifth
succeeding taxable years, in that order and to the
extent not deemed taxes paid or accrued in a prior
taxable year, in the amount by which the limitation
under subsection (a) for such preceding or succeeding
taxable year exceeds the sum of the taxes paid or
accrued to foreign countries * * * for such preceding
or succeeding taxable year and the amount of the taxes
for any taxable year earlier than the current taxable
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