USAco, a domestic corporation, builds a manufacturing facility in country F. The foreign manufacturing operations generate $100,000 of taxable income in year 1 and a $100,000 taxable loss in year 2. USAco does not repatriate any of the year 1 earnings. Discuss the amount of income or loss that USAco would report on its Form 1120 for each year under the following two options:

1. USAco operates in country F as a branch, or
2. USAco operates in country F as a subsidiary.