DO NOT COPY OTHER ANSWERS; ACTUALLY WORK IT OUT:

Oasis Co$.,$ a U$.$S$.$ shareholder, owns $100\%$ of Shack Co$.$ and $100\%$ of Studio Co$.,$ both CFCs$.$ Shack Co$.$ has $$300,000$ of gross income, of which $$50,000$ is effectively connected income, and $$30,000$ is interest expense without any allocable interest income. Shack Co$.$ has

$$500,000$ of machinery used in its trade or business. Studio Co$.$ has a $$150,000$ loss and machinery worth $$1,000,000$ used in its

operations.

a$.$ What is GILTI for Oasis Co$.?$

$

$x$

b$.$ What impact do the operations of Shack Co$.$ and Studio Co$.$ have on Oasis Co$.\text{'}$s U$.$S$.$ taxable income?

Oasis must include $

$x$ of GILTI in its U$.$S$.$ taxable income, but will also get a deduction for

of its GILTI

inclusion. As a result, its taxable income will increase by $

$x.$