AirCo, a Domestic Corporation, Purchases Inventory for Resale from Unrelated

question 56

Multiple Choice

AirCo, a domestic corporation, purchases inventory for resale from unrelated distributors within the United States and resells this inventory to customers outside the United States with title passing outside the United States. What is the sourcing of AirCo's inventory sales income?

• A) 100% U.S. source.
• B) 100% foreign source.
• C) 50% U.S. source and 50% foreign source.
• D) 50% foreign source and 50% sourced based on location of manufacturing assets.

---

Definitions:

Minor

An individual under the age of majority, legally considered not yet fully capable of taking on certain responsibilities and rights.

Contractual Purposes

The intended aims or goals that parties seek to achieve through entering into a contract.

Covenant Not to Compete

A legal agreement in which one party agrees not to enter into or start a similar profession or trade in competition against another party.

Unreasonable

Actions or decisions that lack rational basis, often seen as unfair or unjustified under the given circumstances.