All of the Following Foreign Corporations Derive More Than 50

question 24

Multiple Choice

All of the following foreign corporations derive more than 50 percent of their income from subpart F income. Which of them must recognize the subpart F income in the year in which it is earned? The percentage ownership of each shareholder is provided in parenthesis.

• A) U.S. shareholder A (10), Foreign shareholder B (20), U.S. shareholder C (35), U.S. shareholder D (5), Foreign shareholder E (15), U.S. shareholder F (15)
• B) U.S. shareholder A (5), Foreign shareholder B (40), U.S. shareholder C (15), U.S. shareholder D (15), Foreign shareholder E (10), U.S. shareholder F (15)
• C) U.S. shareholder A (50), Foreign shareholder B (20), U.S. shareholder C (5), U.S. shareholder D (5), Foreign shareholder E (15), U.S. shareholder F (5)
• D) all of the above since subpart F income exceeds 50 percent of total.

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Definitions:

Unlawful Taking

The illegal appropriation or seizure of property without permission or legal right.

Conversion

In law, an act of wrongfully taking, using, or disposing of the personal property of another without consent.

Wrongfully Taking

Illegally taking possession of someone else's property without permission, akin to theft or larceny.

Trespass To Land

A legal term referring to the unauthorized entry onto another person's property.