56. USCo manufactures and markets electrical components. USCo operates outside the United States through a number of
Question:
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.
Step by Step Answer:
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