USAco, a domestic corporation, builds a manufacturing facility in country F. The foreign manufacturing operations generate $100,000 of taxable income in year 1 and a $100,000 taxable loss in year 2. USAco does not repatriate any of the year 1 earnings. 

Discuss the amount of income or loss that USAco would report on its Form 1120 for each year under the following two options:

1. USAco operates in country F as a branch
2. USAco operates in country F as a subsidiary

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i The answer to the above question is 100000 if the foreign operations are conducted as a bran... View the full answer