Goolsbee, Inc., a U.S. corporation, generates U.S.source and foreignsource gross income. Goolsbee's assets (tax
book value) are as follows.
$\begin{array}{lr}
\text { Generating U.S.-source income } & \$ 15,000,000 \
\text { Generating foreign-source income } & \underline{25,000,000} \
\text { Total } & \$ 40,000,000 \
\end{array}$
Goolsbee incurs interest expense of $200,000. Using the asset method and the tax book value, apportion interest
expense to foreign-source income.

Question

Goolsbee, Inc., a U.S. corporation, generates U.S.­source and foreign­source gross income. Goolsbee's assets (tax
book value) are as follows.
 $\begin{array}{lr}
\text { Generating U.S.-source income } & \$ 15,000,000 \
\text { Generating foreign-source income } & \underline{25,000,000} \
\text { Total } & \$ 40,000,000 \
\end{array}$ 
Goolsbee incurs interest expense of $200,000. Using the asset method and the tax book value, apportion interest
expense to foreign-source income.

Quizplus · Accepted Answer

The Answer of Goolsbee, Inc., a U.S. corporation, generates U.S.­source and foreign­source gross income. Goolsbee's assets (tax
book value) are as follows.
 $\begin{array}{lr}
\text { Generating U.S.-source income } & \$ 15,000,000 \
\text { Generating foreign-source income } & \underline{25,000,000} \
\text { Total } & \$ 40,000,000 \
\end{array}$ 
Goolsbee incurs interest expense of $200,000. Using the asset method and the tax book value, apportion interest
expense to foreign-source income.

Goolsbee, Inc Goolsbee Incurs Interest Expense of $200,000