56. USCo manufactures and markets electrical components. USCo operates outside the United States through a number of

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56. 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:

a. F1 has gross income of $5 million, including

$200,000 of foreign personal holding company interest and $4.8 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 $5 million, including

$4 million of foreign personal holding company interest and $1 million of gross income from the sale of inventory that F2 manufactured at a factory located within its home country.

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

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Taxation Of Individuals And Business Entities 2020

ISBN: 9781259969614

11th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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