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Furco, a privately held corporation organized in Argentina, sells luxury fur coats (manufactured by an affiliated corporation) in its showroom in Los Angeles, to U.
Furco, a privately held corporation organized in Argentina, sells luxury fur coats (manufactured by an affiliated corporation) in its showroom in Los Angeles, to U. S. customers. In all cases, title passes to the customers in the U. S.. Furco rented the showroom and funded its branch operation with a $200,000 contribution. For Year 1, it earned $100,000 of U. S. net income, paid tax of $21,000, and invested the rest of its earnings in its U. S. showroom. In Year 2, it earned $200,000 of such net income, paid tax of $42,000, placed the excess earnings in a U. S. bank account, and repatriated $50,000 to Argentina. In Year 3, it earned $300,000 of net income, paid tax of $63,000, and repatriated $250,000. Assuming that Argentina does not have a treat with the U.S., what is the amount of branch profits tax will Furco incur in year 3. Group of answer choices A. None B. $15,000 C. $75,000 D. $100,000
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