Question: Posse Corporation plans to form a foreign subsidiary through which to conduct a new business in Country J. Posse projects that this business will operate

Posse Corporation plans to form a foreign subsidiary through which to conduct a new business in Country J. Posse projects that this business will operate at a loss for several years.
a. To what extent will the subsidiary’s losses generate U.S. tax savings?
b. To what extent will the subsidiary’s losses generate a savings of Country J income tax?

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