Lincoln Corporation,which Has a 34% Marginal Tax Rate,owns 50% of the Stock

question 27

Multiple Choice

Lincoln Corporation,which has a 34% marginal tax rate,owns 50% of the stock of a controlled foreign corporation (CFC) .At the beginning of the year,Lincoln's basis in its CFC stock was $100,000.The CFC's current year income was $1 million,$600,000 of which was subpart F income.The CFC paid no foreign income tax and distributed no dividends.What is Lincoln's tax basis in its CFC stock at the end of the taxable year?

• A)$100,000
• B)$300,000
• C)$400,000
• D)$0

---

Definitions:

Eukaryotic Flagellum

Eukaryotic Flagellum refers to a lash-like appendage that protrudes from the cell body of certain eukaryotic cells, used primarily for locomotion.

Surface Area

The total extent of the outer layer or covering of an object, often related to the rate of processes like absorption and evaporation.

Volume

Volume is the amount of space that an object or substance occupies, measured in cubic units.

Cilia

Microscopic, hair-like structures on the surface of cells that move in a wave-like manner to transport substances or propel cells.