A Japanese corporation owned by 11 U.S. individuals cannot be treated as a controlled foreign corporation for U.S. tax purposes.

Question

Quizplus · Accepted Answer

A Japanese corporation can be considered a controlled foreign corporation (CFC) for U.S. tax purposes if more than 50% of the corporation's stock is owned by U.S. shareholders, defined as U.S. persons who own 10% or more of the foreign corporation's stock by vote or value. Since the corporation is owned by 11 U.S. individuals, it could be treated as a CFC if these individuals meet the ownership criteria.

A Japanese Corporation Owned by 11 U