USAco is a wholly-owned U.S. subsidiary of ForCo, a foreign corporation. USAco's only assets are cash of $400,000, accounts receivable of $400,000, and its U.S. manufacturing plant with a value of $1 million. In addition, USAco has carried a mortgage on the manufacturing plant of $600,000 for the last 10 years. ForCo sells its shares to a buyer for $1,800,000. Which of the following best describes the tax implications?

Question 20 options:

1)	The buyer does not have to withhold.

2)	The buyer must withhold $180,000, since USAco is a U.S. Real Property Holding Corporation.

3)	USAco cannot deduct any interest it pays.

4)	The buyer must withhold $270,000, since USAco is a U.S. Real Property Holding Corporation.