BlueCo, a domestic corporation, incorporates GreenCo, a new wholly owned entity in Germany. Under both German and

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 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 under Subpart F? Ignore any foreign tax credit (FTC) implications.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...