Question

BlueCo, a domestic corporation, incorporates GreenCo, a new wholly owned entity in Germany. Under both German and U.S. legal principles, this entity is a corporation. BlueCo faces a 35% U.S. tax rate.
GreenCo earns $1,500,000 in net profits from its German activities, and GreenCo makes no dividend distributions to BlueCo. How much Federal income tax will BlueCo pay for the current year as a result of GreenCo's earnings, assuming that there is no deemed dividend under Subpart F? Ignore any foreign tax credit (FTC) implications.


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  • CreatedMay 25, 2015
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