Goolsbee,Inc Goolsbee Incurs Interest Expense of $200,000

question 71

Essay

Goolsbee,Inc.,a U.S.corporation,generates U.S.-source and foreign-source gross income.Goolsbee's assets (tax book value)are as follows.
$\begin{array}{ll}\text { Generating U.S.-source income } & \$ 15,000,000 \\\text { Generating foreign-source income } & \underline{25,000,000} \\\text { Total } & \underline{\$ 40,000,000}\end{array}$ Goolsbee incurs interest expense of $200,000.Using the fair market value and the tax book value,apportion interest expense to foreign-source income.

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