Tradewinds Is a Bermuda Corporation That Is 100% Owned by Larkin,a

question 11

Multiple Choice

Tradewinds is a Bermuda corporation that is 100% owned by Larkin,a U.S.corporation.Which of the following transactions generates subpart F income for U.S.tax purposes?

• A)Tradewinds manufactures costume jewelry in Bermuda and sells the jewelry to Larkin for distribution in the United States and Canada.
• B)Tradewinds manufactures costume jewelry at its plant in Mexico and sells the jewelry to Larkin for distribution in the United States and Canada.
• C)Tradewinds purchases costume jewelry from a related supplier in China and sells the jewelry at retail in Bermuda.
• D)None of the above generates subpart F income.

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