Hector is a U.S. citizen. In 20Y1, Hector pays $1 million for 1% of the stock of Fco, a

foreign corporation that qualifies as a passive foreign investment company, but is not

a controlled foreign corporation. Hector does not make a qualified electing fund

election with respect to his interest in Fco. During 20Y1 to 20Y4, Fco makes no

distributions to Hector. On December 31, 20Y4, when Fco has accumulated earnings & profits of $400 million, Hector sells all of his Fco stock for $5 million. Assume the highest U.S. individual income tax rate in 20Y1 to 20Y4 was 40%,

and the interest rate for computing the Code Sec. 1291(c) deferred tax amount is 3%

for a tax due one year ago, 6% for a tax due two years ago, and 9% for a tax due three

years ago.

Determine Hectors U.S. tax on his sale of shares in Fco.