OutCo, a Controlled Foreign Corporation in Meena, Earns $600,000 in Net

question 138

Multiple Choice

OutCo, a controlled foreign corporation in Meena, earns $600,000 in net interest and dividend income from investments in the bonds and stock of unrelated companies.All of the dividend payors are located in Meena.OutCo's Subpart F income for the year is:

• A)$0.
• B)$0 only if OutCo is engaged in a trade or business in Meena.
• C)$600,000.
• D)$600,000 only if OutCo is engaged in a trade or business in Meena.

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Definitions:

U.S. Imports

Goods and services purchased by residents of the United States from other countries.

U.S. Exports

Goods and services produced in the United States that are sold to other countries.

Foreign Portfolio Investment

Foreign portfolio investment involves holding financial assets from a country outside of the investor's own country.

Net Capital Outflow

The difference between the domestic country's purchases of foreign assets and foreign investments in the domestic country over a specific period.