U.S. parent company operates a wholly owned subsidiary in Switzerland. U.S. parent company manufactures its products in Chicago and then sells the products to its Swiss subsidiary. The Swiss subsidiary makes no modifications or changes to the product before selling it on to customers in France, Italy, and Germany. In 2019, all income earned by the Swiss subsidiary came from the resale of products manufactured by the U.S. parent and such income totaled $10 million. Assume the Swiss tax rate is 12%.

How will the income earned by the Swiss subsidiary be taxed by the United States? Include all relevant Code sections, calculations, and key definitions in your answer.