Solved

During Year 4, Josita, an NRA, Receives Interest Income of $50,000

Question 112

Essay

During year 4, Josita, an NRA, receives interest income of $50,000 from Talmadge, Inc., an unrelated U.S. corporation. Considering the following facts related to Talmadge's operations, what is the sourcing of the interest income received by Josita?  U.S.-source  Active Foreign  Total Gross  Year  Income  Business Income  Income  Year 1 $200,000$500,000$700,000 Year 2 50,000$50,0001,000,000 Year 3 100,000900,0001,000,000 Totals $350,000$2,350,000$2,700,000 Year 4 $150,000$950,000$1,100,000\begin{array}{lccc} & \text { U.S.-source } & \text { Active Foreign } & \text { Total Gross } \\\text { Year } & \text { Income } & \text { Business Income } & \text { Income } \\\text { Year 1 } & \$ 200,000 & \$ 500,000 & \$ 700,000\\\text { Year 2 } & 50,000 & \$ 50,000 & 1,000,000 \\\text { Year 3 } & \underline{100,000} & {900,000}& \underline{1,000,000} \\\text { Totals } & \underline{\$350,000}&\underline{\$ 2,350,000} & \underline{\underline{\$ 2,700,000}} \\\text { Year 4 } & \$ 150,000 & \$ 950,000 & \$ 1,100,000\\\end{array}

Correct Answer:

verifed

Verified

Talmadge meets the 80% active foreign bu...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents