All of the following foreign corporations derive more than 50 percent of their income from subpart F income. Which of them must recognize the subpart F income in the year in which it is earned? The percentage ownership of each shareholder is provided in parenthesis.
A) U.S. shareholder A (10) , Foreign shareholder B (20) , U.S. shareholder C (35) , U.S. shareholder D (5) , Foreign shareholder E (15) , U.S. shareholder F (15)
B) U.S. shareholder A (5) , Foreign shareholder B (40) , U.S. shareholder C (15) , U.S. shareholder D (15) , Foreign shareholder E (10) , U.S. shareholder F (15)
C) U.S. shareholder A (50) , Foreign shareholder B (20) , U.S. shareholder C (5) , U.S. shareholder D (5) , Foreign shareholder E (15) , U.S. shareholder F (5)
D) all of the above since subpart F income exceeds 50 percent of total.
Correct Answer:
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