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

question 147

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. $\begin{array}{lr}\text { Generating U.S.-source income } & \$ 15,000,000 \\\text { Generating foreign-source income } & 25,000,000 \\\text { Total } &\$ 40,000,000\end{array}$ ​
Goolsbee incurs interest expense of $200,000. Using the asset method and the tax book value, apportion interest expense to foreign-source income.

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