Community Autos A.G. ("Community") is a German corporation engaged in the manufacture of automotive parts. All of Community's operating facilities are located in Europe except for a factory in the United States. During the tax year, Community has average worldwide liabilities of $10 million on which interest at the average rate of 10 percent is paid. Average total liabilities of $2 million are reflected on the books of the U.S operation, on which interest of $280,000 (14 percent) is paid. The average fair market of all of Community's assets is $50 million. These assets have a book value for tax purposes of $40 million. The average fair market value of Community's assets in the United States (all of which are connected with the operation of the factory) is $10 million. These assets have a book value of $5 million. All liabilities appearing on the books of the U.S. operation are US dollar obligations. All other liabilities are also in US dollars.

What is the minimum interest deduction that may be taken against the effectively connected income of the US branch, assuming that no prior elections have been made? Would your answer change if the debt not related to the US operation had been established in a foreign currency?