Portsmouth Corporation, a British Corporation, Is a Wholly Owned Subsidiary

question 41

Essay

Portsmouth Corporation, a British corporation, is a wholly owned subsidiary of Salem Corporation, a U.S. corporation. During the year, Portsmouth reported the following income:
$250,000 interest income received from a loan to an unrelated French corporation.
$100,000 dividend income received from a less than 1 percent owned unrelated Dutch corporation.
$150,000 rent income from an unrelated British corporation on property Portsmouth actively manages.
$500,000 gross profit from the sale of inventory manufactured by Portsmouth in Great Britain and sold to a 100 percent owned subsidiary in Germany.
What amount of subpart F income does Portsmouth recognize in the current year?

---

Definitions:

Prenatal Development

The process of growth and development within the womb from conception to birth.

Stages

Distinct phases within a development process or sequence of events through which individuals or systems pass.

Primary Sexual Characteristics

These are the physical features directly involved in reproduction, such as the ovaries in females and the testes in males.

Secondary Sexual Characteristics

Traits that emerge in organisms during puberty but are not directly involved in reproduction, such as breast development in females and facial hair in males.