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

question 96

Essay

Goolsbee, Inc., a U.S. corporation, generates U.S.-source and foreign-source gross income. Goolsbee's assets tax basis) are as follows.
$$\begin{array} { l r } \text { Generating U.S.-source income } & \$ 15,000,000 \\\text { Generating foreign-source income } & \underline { 25,000,000 } \\\text { Total } & \$ 40,000,000 \\\hline\end{array}$$
Goolsbee incurs interest expense of $200,000. Apportion interest expense to foreign-source income.

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Definitions:

Displacement

in psychological terms, is transferring feelings or actions from the original object of those emotions to another target.

Projection

Attributing one’s own thoughts, feelings, or motives to another person.

Regression

A return to an earlier or less advanced condition or state, often viewed in psychological contexts as a defense mechanism.

Defense Mechanisms

Largely unconscious reactions that protect a person from unpleasant emotions such as anxiety and guilt.