Inc. is a US corporation. The corporate tax rate is currently 21%. In the last three-years, its average gross receipts were $768 million. In 2023, it earned the following:

 

• Revenue of $873 million
• Total deductions of $491 million (net income of $382 million)
• Of the total deductions, $397 million were interest deductions paid to a foreign financing affiliate of How Are You! Inc. on amounts borrowed from the non-U.S. affiliate

2. Is How Are You! Inc. subject to the BEAT? Why?
4. If your answer to a. is yes, will its US tax liability change because of the BEAT?
6. If How Are You! Inc. was a bank, would your answer to a. and b. change? Why?

Answer rating: 100% (QA)

Yes How Are You Inc would be subject to the Base Erosion and AntiAbuse Tax BEAT under the Tax Cuts a... View the full answer