LearCo, a non-U.S. conglomerate, generates $4 billion in gross receipts annually. Its U.S. subsidiary, KingCo, accounts for
Fantastic news! We've Found the answer you've been seeking!
Question:
LearCo, a non-U.S. conglomerate, generates $4 billion in gross receipts annually. Its U.S. subsidiary, KingCo, accounts for $750 million of the annual gross receipts (and its average annual gross receipts for the last three years is $820 million). KingCo generates U.S. taxable income income of $180 million, after deducting a $350 million management fee that it pays to LearCo. KingCo reports no U.S. tax credits. The corporate income tax rate in LearCo’s country is 14%.
Required:
What are the tax implications (if any) of this arrangement?
Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
Posted Date: