A Controlled Foreign Corporation (CFC)is Incorporated in Country B,and Is

question 41

Multiple Choice

A controlled foreign corporation (CFC) is incorporated in Country B,and is 100% owned by American Manufacturing Corporation.It purchases raw materials from its U.S.parent corporation,manufactures widgets,and sells 70% of the widgets to unrelated purchasers in Country A and 30% to unrelated purchasers in Country B.All widgets will be used in the countries in which they are purchased.The sales produce $100,000 of taxable income.The foreign-base company sales income reportable by American Manufacturing Corporation under the Subpart F rules is

• A)$0.
• B)$30,000.
• C)$70,000.
• D)$100,000.

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Definitions:

Step-Variable Cost

A cost that remains fixed for a certain level of production or activity, but jumps to a higher amount once a certain threshold is exceeded.

Helpline

A service providing information and support to people in need, typically available via telephone or the internet.

Volume

Refers to the quantity of an item produced or sold over a specific period of time.

Calls

A financial instrument giving the holder the right, but not the obligation, to buy an asset at a specified price within a specific period.