Lincoln Corporation, a U.S. corporation, owns 50% of the stock of a controlled foreign corporation (CFC). At the beginning of th

Question

2 years ago

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Lincoln Corporation, a U.S. corporation, owns 50% of the stock of a controlled foreign corporation (CFC). At the beginning of th

e year, Lincoln's basis in its CFC stock was $100,000. The CFC's current-year income was $1 million, $600,000 of which was subpart F income. The CFC has no global intangible low-taxed income, paid no foreign income tax and distributed no dividends. How much current taxable income must Lincoln report as a result of its ownership of the CFC

Business

1 answer:

Natali [406] · Answer 1 · 2022-10-14T03:31:16+03:00

Answer:

$300,000

Explanation:

Calculation to determine How much current taxable income must Lincoln report as a result of its ownership of the CFC

Using this formula

Taxable income=Subpart F income * Ownership percentage

Let plug in the formula

Taxable income=$600,000*50%

Taxable income=$300,000

Therefore The amount of current taxable income that Lincoln must report as a result of its ownership of the CFC is $300,000