Credit method permits foreign tax credit limited to the tax attributable to income or capital taxed abroad to avoid double taxation.

The Credit Method requires a resident's State to allow a deduction from domestic tax for income or capital tax paid in the other State, limited to the part of domestic tax attributable to the income or capital taxable in the other State. Where income or capital is treaty-exempt in the resident State, that State may take the exempted items into account when calculating tax on the resident's remaining income or capital.

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