Wooden Shoe Corporation is a 100 percent owned Dutch subsidiary of Tulip Corporation,a U.S.corporation.Wooden Shoe had post-1986 earnings and profits of €3,000,000 and post-1986 foreign taxes of $1,000,000.During the current year,Wooden Shoe paid a dividend of €300,000 to Tulip.Assume an exchange rate of €1 = $1.40.No withholding tax was imposed on the dividend.What amount of taxable income does the dividend generate on Tulip's U.S.tax return?

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The Answer of Wooden Shoe Corporation is a 100 percent owned Dutch subsidiary of Tulip Corporation,a U.S.corporation.Wooden Shoe had post-1986 earnings and profits of €3,000,000 and post-1986 foreign taxes of $1,000,000.During the current year,Wooden Shoe paid a dividend of €300,000 to Tulip.Assume an exchange rate of €1 = $1.40.No withholding tax was imposed on the dividend.What amount of taxable income does the dividend generate on Tulip's U.S.tax return?

Wooden Shoe Corporation Is a 100 Percent Owned Dutch Subsidiary