American Chicle Co. v. United States
In American Chicle Co. v. United States, 316 U.S. 450, 62 S.Ct. 1144, 86 L.Ed. 1591 (1942), the Supreme Court established the formula for the 902 credit for taxes deemed to have been paid on profits distributed as dividends.
The numerator is the dividends received by the parent corporation. The denominator is the accumulated profits of the foreign subsidiary corporation.
The multiplicand is the taxes paid upon or with respect to the accumulated profits of the foreign corporation; i.e., 'so much of the taxes as is properly attributed to the accumulated profits, or the same proportion of the total taxes which the accumulated profits bear to the total profits.' 316 U.S. at 452, 62 S.Ct. at 1145.