A Foreign Corporation with a Single Class of Stock Is

question 78

Essay

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark. Bert, Ernie, and Mark are U.S. citizens, and Xi Yong is a nonresident alien. Bert is Ernie's son. Is the foreign corporation a controlled foreign corporation (CFC)?

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Definitions:

Reinstated

Restoring something to its previous state or position, often used in the context of employment, insurance, or legal status.

Direct Write-off

A method for recognizing bad debts, where uncollectible accounts receivable are directly written off against income at the time they are deemed noncollectible.

Allowance for Doubtful Accounts

A financial accounting provision estimating the portion of accounts receivable that may not be collectible.

Uncollectible

Refers to accounts receivable that are unlikely to be recovered and are therefore considered as bad debt.