14-1. A, B, and C, each United States citizens and residents, own one-third of the stock of Z Corporation, a Bolivian corporation formed as a Sociedad Anonima.

a. In Year 1, Z Corporation again earns $100,000 in interest income and $200,000 in dividend income. What US income result?

b. In Year 2, Z Corporation again earns $100,000 in interest and $200,000 in dividend income. It also opens a travel business in Bolivia, which generates $7,000,000 in gross income. What US income result? What if it generates $90,000 of such gross income?