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.

Required:

Note: Round your final answer to 1 decimal place.

a. F1 has gross income of $9.50 million, including $380,000 of foreign personal holding company interest and $9.12 million of gross income from the sale of inventory that F1 manufactured at a factory located within its home country.

Amount of income reported ___ million

b. F2 has gross income of $6.8 million, including $5.10 million of foreign personal holding company interest and $1.70 million of gross income from the sale of inventory that F2 manufactured at a factory located within its home country.

Amount of income reported ___ million