Santa Fe Corporation manufactured inventory in the United States and sold the inventory to customers in Mexico. Gross profit from the sale of the inventory was $247,000. Title to the inventory passed FOB: shipping point. How much of the gross profit is treated as foreign source income for purposes of computing the corporation's foreign tax credit in the current year?

Question

Quizplus · Accepted Answer

Since the title to the inventory passed at the shipping point in the United States, the sale is considered a U.S. source income, not foreign source income.

Santa Fe Corporation Manufactured Inventory in the United States and Sold