Lori Limited $($Lori$)$ is an Irish incorporated, non$-$publicly traded entity, which was formed in January $2022,$ and treated as a foreign corporation with a calendar year end for U$.$S$.$ tax purposes. Lori has $10,000$ shares of voting common stock outstanding. Lori has no other outstanding or authorized stock. ABC, Inc., a U$.$S$.$ C$-$Corporation with a calendar year end, owns $8,000$ shares of Shamrock. Patrick, a U$.$S$.$ citizen, owns $750$ shares of Shamrock, and neither he nor any related person holds shares, directly or indirectly, in ABC, Inc. The remaining $1,250$ shares of Lori are owned by a United Kingdom $($UK$)$ corporation, Cheers Limited, which holds no shares, directly or indirectly, in ABC, Inc. Cheers Limited has $1,000$ shares of a single class of common stock outstanding, which are all owned by a UK individual, Nigel, who is unrelated to Patrick, and neither he nor a related person holds shares, directly or indirectly, in ABC, Inc.

Part A:

Lori purchases widgets, which are manufactured by ABC, Inc. in the United States, and sells twenty percent $(20\%)$ of them to unrelated customers in Ireland and eighty percent $(80\%)$ of them to unrelated customers outside of Ireland. In calendar year $2022,$ Lori generated $$10,000,000$ of gross income from the sale of widgets purchased from ABC, Inc. Of the $$10,000,000$ of gross sales income, $$2,000,000$ was generated from the Irish sales, while the remaining $$8,000,000$ was from sales generated outside of Ireland. For simplicity purposes, assume that Lori had no allowable deductions for the calendar year with respect to this gross sales income. Therefore, Ireland levied a corporate income tax at a flat rate of fifteen percent $(15\%)$ on the gross sales income generated by Lori $-$ i$.$e$.,$ Irish Corporate Income Tax: $$1,500,000[$Gross Sales Income: $$10,000,000*15\%].$

$($a$.)$ Is Lori a controlled foreign corporation $($CFC$)$ for the current year? Please explain.

$($b$.)$ In calendar year $2022,$ do any of the Lori shareholders have a Subpart F income inclusion? If so$,$ please identify the type of Subpart F income, the amount of each shareholder$$s Subpart F income inclusion, if any, and the associated U$.$S$.$ tax consequences, as well as how the inclusion will be $$basketed$$ for foreign tax credit limitation purposes, if applicable. For purposes of this question, assume a flat U$.$S$.$ corporate income tax rate of $21\%.$ Also, assume that no deductible U$.$S$.-$based expenses would be allocated and apportioned against any Subpart F income inclusion and ignore the Global Intangible Low$-$Taxed Income $($GILTI$)$ rules. Please explain.

$($c$.)$ In calendar year $2023,$ Lori broke$-$even $$ i$.$e$.,$ generated no current year earnings and profits $($E&P$),$ paid no foreign income taxes, and declared & paid an $$8,500,000$ dividend pro$-$rata to its shareholders on December $31,2023,$ which was not subject to an Irish dividend withholding tax. Assuming a flat U$.$S$.$ corporate income tax rate of $21\%,$ what are the U$.$S$.$ tax consequences to each shareholder. Also, assume that the United States has entered into a bilateral income tax treaty with Ireland.

Part B:

Alternatively, in calendar year $2022,$ assume Lori generated $$10,000,000$ of gross income having the following characteristics: $$6,000,000$ in foreign$-$source interest income from unrelated persons; $$800,000$ in gross income from active foreign business activities, which constitutes foreign base company sales income; and $$3,200,000$ in gross income from active foreign business activities, which does not constitute foreign base company sales income. For simplicity purposes, assume that Lori has no allowable deductions for the calendar year with respect to this gross income, and the ownership structure remains unchanged. Therefore, Ireland levied a corporate income tax at a flat rate of fifteen percent $(15\%)$ on the gross income generated by Lori $-$ i$.$e$.,$ Irish Corporate Income Tax: $$1,500,000[$Gross Income: $$10,000,000*15\%].$

In calendar year $2022,$ Shamrock$$s assets consist of the following: assets producing passive income or held for the production of passive income, which have an average adjusted basis of $$33,000,000$; and assets that are used to conduct its active trade or business activities, which have an average adjusted basis of $$27,000,000.$

$($a$.)$ Is Lori a controlled foreign corporation $($CFC$)$ for the current year?

$($b$.)$ Is Lori a Passive Foreign Investment Company $($PFIC$)$ for the current year?

$($c$.)$ In calendar year $2022,$ do any of the Lori shareholders have a Subpart F income inclusion? If so$,$ please identify the type of Subpart F income, the amount of each shareholder$$s Subpart F income inclusion, if any, and the associated U$.$S$.$ tax consequences, as well as how the inclusion will be $$basketed$$ for foreign tax credit limitation purposes, if applicable. For purposes of this question, assume a flat U$.$S$.$ corporate income tax rate of $21\%.$ Also, assume that no deductible U$.$S$.-$based expenses would be allocated and apportioned against any Subpart F income in