Required information

Skip to question

[The following information applies to the questions displayed below.]

USCo manufactures and markets electrical components. USCo operates outside the United States through a number of CFCs, each of which is organized in a different country. These CFCs derived the following income for the current year:

Determine the amount of income that USCo must report as a deemed dividend under subpart F in each scenario.

Note: Leave no answer blank. Enter zero if applicable. Round your final answer to 1 decimal place.

a. F1 has gross income of $13.00 million, including $390,000 of foreign personal holding company interest and $12.61 million of gross income from the sale of inventory that F1 manufactured at a factory located within its home country.

b. F2 has gross income of $8.2 million, including $7.38 million of foreign personal holding company interest and $0.82 million of gross income from the sale of inventory that F2 manufactured at a factory located within its home country.