On January 1, Year 1, Jonesy, a United States citizen, and USCo, an unrelated domestic corporation, form FiletCo, a calendar year Argentinian corporation that specializes in serving the finest Cajun crusted bone-in filets and exotic wines in Argentina. Jonesy and USCo each contribute $50,000 in exchange for 50 shares of FiletCo's common stock. Using this seed capital, on January 1, Year 1, FiletCo purchases inventory of $60,000 and invests the remaining $40,000 in ovens and other tangible equipment used in its restaurant operations. Additions of tangible equipment during Year 1 perfectly offset quarterly depreciation expenses, so that the average quarterly depreciable basis of FiletCo's tangible property is $40,000.  Notwithstanding the stiff competition, FiletCo's business immediately wins over the critics. During Year 1, FiletCo earns a net profit of $150,000, which amounts are reinvested into FiletCo's business for additional capital expenditures during Year 2. To attract new business ventures, the Argentina tax authority provides an exemption from Argentina tax for any profits earned by a newly-formed business during Year 1. 

(a) What are the United States income tax consequences for FiletCo, Jonesy, and USCo in Year 1? 

(b) How would your answer to (a) change if FiletCo also earns $100,000 of interest income from unrelated persons?

(c) How would your answer to (a) change if FiletCo pays $30,000 of foreign taxes in Year 1 on its $150,000 of net profit? 

(d) How would your answer to (a) change if FiletCo incurs a loss of $75,000 during Year 1? 

(e) In addition to the facts set forth assume Jonesy and USCo form another Argentinian corporation, KobeCo, on January 1, Year 1. Although the shareholders contribute the same amounts, and KobeCo invests the same amounts in the same types of assets as FiletCo, this venture is a flop, producing a $75,000 loss for Year 1. 

How would your answer to change?