The Following Persons Own Schlecht Corporation,a Foreign Corporation

question 90

Multiple Choice

The following persons own Schlecht Corporation,a foreign corporation. Jim,U.S.individual 35% Gina,U.S.individual 15% Marina,U.S.individual 8% Pedro,U.S.individual 12% Chee,non-U.S.individual 30% ​ None of the shareholders are related.Subpart F income for the tax year is $300,000.No distributions are made.Which of the following statements is correct?

• A)Schlecht is not a CFC.
• B)Chee includes $90,000 in gross income.
• C)Marina is not a U.S.shareholder for purposes of determining whether Schlecht is a CFC.
• D)Marina includes $24,000 in gross income.

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Definitions:

Direct Materials

These are raw materials that are directly used in the production of a product and are easily traceable to the product itself.

Materials Inventory

The total cost of all the materials that are currently stored by a company and that will be used in production.

Raw Materials

The basic materials from which a product is made, usually referring to unprocessed or minimally processed substances used in manufacturing.

Manufacturing Cost Data

Information related to the expenses associated with the production process, including direct materials, direct labor, and manufacturing overhead.