In 2017, Phoenix Corporation Is a Controlled Foreign Corporation (CFC)incorporated

question 55

Multiple Choice

In 2017, Phoenix Corporation is a controlled foreign corporation (CFC) incorporated in Country X. It is 100% owned by its U.S. parent corporation. Phoenix has $80,000 of taxable income from the sale of widgets that were purchased from their U.S. parent corporation. All widgets are intended for use or consumption within Country X and have the same gross profit. Sixty percent of the widgets were sold through a Country X wholesaler that is 100% owned by Phoenix, and 40% are sold through unrelated Country X wholesalers. What amount of profits will be constructively distributed as foreign-based company sales income to the U.S. parent company?

• A)$0
• B)$32,000
• C)$48,000
• D)$80,000

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Definitions:

Incision

A cut made in the body during surgery or a medical procedure to access or remove tissue.

Treatment

The management and care of a patient for the purpose of combating a disease, condition, or disorder.

Urination

The process of excreting urine from the urinary bladder through the urethra to the outside of the body.

Urine

A liquid waste product filtered from the blood by the kidneys and expelled from the body.