Jumper Inc., which has a 21 percent tax rate, owns 40 percent of the stock of a CFC. At the beginning of 2019, Jumper’s basis in its stock was $660,000. The CFC’s 2019 income was $1 million, $800,000 of which was subpart F income. The CFC paid no foreign income tax and distributed no dividends. 

a. Compute Jumper’s 2019 constructive dividend and related tax cost as a result of its investment in the CFC. 

b. Compute Jumper’s basis in its CFC stock at the beginning of 2020.