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A foreign subsidiary has $2,000,000 of taxable income, a (foreign) corporate tax rate of 25%, and a foreign dividend withholding rate of 10%. The U.S.
A foreign subsidiary has $2,000,000 of taxable income, a (foreign) corporate tax rate of 25%, and a foreign dividend withholding rate of 10%. The U.S. (domestic) parent has a corporate tax rate of 30%. What are the additional taxes paid by the U.S. domestic parent after the foreign subsidiary pays corporate and withholding taxes? Assume that the foreign subsidiary is 100% owned by the U.S. parent and that all after-tax income is paid to the U.S. parent.
Question 9 options:
A) $0.00 | |
B) $600,000 | |
C) $405,000 | |
D) $250,000 |
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