2) USA Co., a U.S. corporation, has its only foreign business operations in foreign country D. For the year ended 12/31/2016, the foreign operations have net earnings, after foreign taxes, of $1,000,000. USA Co. did not repatriate any of the earnings from the foreign operations in foreign country D during 2016.

Which one of the following statements is true?

a. If the foreign operations are operated as a subsidiary, USA Co. does not report any taxable income from its foreign operations in 2016

b. If the foreign operations are operated as a subsidiary, USA Co. has $1,000,000 of taxable loss in 2016

c. If the foreign operations are operated as a subsidiary, USA Co. has $1,000,000 of taxable income in 2016

d. If the foreign operations are operated as a branch, USA Co. has $1,000,000 of taxable losses in 2016 from the foreign operations