Hawkeye Networks is a U.S. corporation with $20 million of U.S. source income and no foreign-source income of its own. Hawkeye Networks has wholly owned subsidiaries in Korea and Singapore. The Korean subsidiary has $43 million of pretax Korean-source income, faces a 40% Korean tax rate, and pays a $10 million dividend to Hawkeye Networks. The Singapore subsidiary has $7 million of pretax Singapore-source income, faces a 25% Singapore tax rate, and pays a $2 million dividend to Hawkeye.

a. How much taxable income will Hawkeye Networks report on its U.S. tax return? Assume repatriation of income from the foreign subsidiaries will qualify for the participation exemption for U.S. purposes.

b. Now suppose the Singapore subsidiary's income is Subpart F income. How much taxable income will Hawkeye Networks report on its U.S. tax return? Assume Hawkeye will take foreign tax credits for foreign taxes paid rather than deducting foreign taxes.