Cheney is a controlled foreign corporation with total foreign earnings of $4 million,of which $1.3 million is considered subpart F income.Cheney owns tangible business property with an adjusted tax basis of $6 million.Compute Cheney's global intangible low-taxed income.

Question

Quizplus · Accepted Answer

Cheney's global intangible low-taxed income (GILTI) is calculated by subtracting 10% of the adjusted tax basis of tangible property ($6 million) from the total foreign earnings ($4 million), and then subtracting the subpart F income ($1.3 million). Thus, GILTI = $4 million - $0.6 million - $1.3 million = $2.1 million.

Cheney Is a Controlled Foreign Corporation with Total Foreign Earnings