Question 1

FOR 2022, USCO HAS TAXABLE INCOME (TI) FROM ITS US OPERATIONS OF $300,000 BUT USCOS NEW BRANCH OPERATION IN COUNTRY X GENERATES A START UP LOSS OF ($200,000). USCOS US TAX RATE IS 21% AND COUNTRY X HAS A TAX RATE OF 30%.

HOW MUCH WILL USCO PAY IN US INCOME TAX IN 2022?

Group of answer choices

$0.00

$63,000

$21,000

$30,000

Question 2

FOR 2023, ASSUME THAT AS TO USCO FROM QUESTION 2, ITS US OPERATIONS AGAIN GENERATE TI OF $300,000 WHILE USCOS BRANCH IN COUNTRY X TURNS THINGS AROUND AND HAS TI OF $200,000. IF NOT FOR THE OVERALL FOREIGN LOSS RECAPTURE RULE (ASSUME THIS RULE DID NOT APPLY), WHAT WOULD USCO PAY TO THE US IN US INCOME TAX FOR 2023?

Group of answer choices

$0.00

$63,000

$21,000

$84,000

Question 3

CONTINUING FROM THE FACTS IN QUESTION 3 BUT NOW APPLYING THE OVERALL FOREIGN LOSS RECAPTURE RULE, HOW MUCH WILL USCO PAY TO THE US IN TAX FOR 2023?

Group of answer choices

$0.00

$63,000

$45,000

$84,000