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U.S. C corporation exports flashlights to Turks and Caicos. To make the product, U.S. C corporation...

U.S. C corporation exports flashlights to Turks and Caicos. To make the product, U.S. C corporation has depreciable assets having a quarterly adjusted basis of $10 million and earns $5 million of tested income. What is U.S. Parents foreign derived intangible income?

a. $1 million

b. $4 million

c. $3 million

d. $2 million

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Answer #1

Answer:

Reduce the Tested Income by 10% of the tangible assets. =$ 5 million - 10%($10Million)

= $4 million

Option (b) $4 million is correct

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