Velox Inc. began operations last year. For its first two taxable years, Velox’s records show the...
Velox Inc. began operations last year. For its first two taxable years, Velox’s records show the following.
| Year 1 | Year 2 | |||
| U.S. source income | $300,000 | $270,000 | ||
| Foreign source income | 200,000 | 630,000 | ||
| Taxable income | $500,000 | $900,000 | ||
| Foreign income tax paid | $ 62,000 | $101,000 |
Compute Velox’s U.S. tax for both years, assuming the foreign source income does not qualify as FDII.
the corporate tax rate is 21 %
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