We have investigated the electronic and magnetic structure of the colossal magnetoresistive Cr-based spinel Fe_0.5Cu_0.5Cr₂S₄ employing magnetic circular dichroism (MCD) of core level absorption (x-ray absorption spectroscopy) spectra in the soft x-ray region. The results here clearly establish that Fe is in the formal trivalent state (Fe³⁺) in this compound, resolving previous controversies. The Cr 2p and Fe 2p x-ray absorption and MCD spectra shows that the magnetic moment of the tetrahedrally coordinated Fe³⁺ are aligned antiparallel to those of the octahedrally coordinated Cr3+. The observed Cu 2p MCD spectra show existence of very small magnetic moments (<0.20μ_B) on the copper sites. The magnetic moments at the Fe and the Cr sites have been obtained based on the magneto-optical sum rules. The results are consistent with the band structure calculation based on the full potential augmented plane wave method.