USInnovate, Inc. (a US corporation) has owned 100% of GlobalTech, Inc. (a Country X per se corporation) for the past ten years. In the current year, GlobalTech earned $400,000,000 of active foreign source income (not Subpart F income) and paid Country X tax at a 15% rate (i.e., $60,000,000 of Country X tax). Also in the current year, GlobalTech paid a $18,000,000 dividend to USInnovate that was subject to a 5 percent Country X withholding rate under the US-Country X treaty (i.e., $900,000 of Country X tax). Ignoring GILTI, respond to each of the three questions below.   USInnovate will be able to treat some of the $60,000,000 of foreign taxes GlobalTech paid in the current year as deemed paid taxes. Briefly explain your response.

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Under the current tax scenario USInnovate Inc a US corporation owns 100 of GlobalTech Inc a Country ... View the full answer