Michigan Motors is a U.S. corporation with $1 billion of U.S.-source income. In addition, Michigan Motors owns 60% of Detroit Parts, a U.S. corporation with a total of $200 million of U.S.-source income, and 100% of Air Paris, a French corporation that has $500 million of French-source income. Neither Detroit Parts nor Air Paris repatriated any earnings in the current year. Assume no book tax differences except those caused by differences in consolidation requirements.

a) How much GAAP income will Michigan Motors report on its consolidated income statement?

b) How much taxable income will Michigan Motors report on its U.S. tax return?