Your only source of foreign income is a marketing WOS in Hong Kong, where the tax rate is 20 percent. At home you pay 35 percent. There is no withholding tax.
(a) Under the 100 percent exclusion method, would you use a high transfer price or a low transfer price for sales to the subsidiary?
(b) Same question as (a), except that the credit method applies.
(c) Same question as (a), but there is a 10 percent import duty on sales to Hong Kong?