International Products, Ltd., a U.S. corporation, has an office and several factories in Brazil and operates branches in Columbia and the United States. During the tax year, the company pays interest of $1,050,000, of which $50,000 is attributable to a nonrecourse loan used to finance the construction of a small factory in Brazil. 

The adjusted basis of the corporation’s assets, which are worth $41,000,000, is $21,000,000, of which $5,000,000 is attributable to assets worth $5,000,000 in Columbia and $5,000,000 is attributable to assets worth $20,000,000 in the United States. The small factory in Brazil has an adjusted basis of $1,000,000 and is worth $1,000,000. 

All other assets are located in Brazil. How much interest is apportioned to the corporation’s U.S.-source income?

Answer rating: 100% (QA)

Net Interest 105000050000 1000000 Value of Assets in ... View the full answer