Austin Corporation, a U.S. corporation, received the following investment income during 2017: $50,000 of dividend income from ownership of stock in a Frenchcorporation, $20,000 interest on a loan to its Dutch subsidiary, $40,000 royalty from its50-percent owned Irish venture, and $30,000 capital gain from sale of its stock in aBrazilian corporation. How much foreign source income does Austin have in 2017?

Question

Quizplus · Accepted Answer

Austin Corporation has foreign source income from the dividend income from the French corporation ($50,000), interest income from its Dutch subsidiary ($20,000), and the royalty income from the Irish venture ($40,000). The capital gain from the sale of the stock in the Brazilian corporation is not foreign source income. Therefore, the total foreign source income for Austin Corporation in 2017 is $50,000 + $20,000 + $40,000 = $110,000.