Sunny, a California corporation, earned the following income this year.
$$\begin{array} { l r }
\text { U.S. source income } & \$ 557,000 \
\text { Foreign source income from Country L branch } & 337,900 \
\text { Foreign source income from Country Q branch } & 965,100 \
\text { Dividends from Sun de Sud } & 400,000
\end{array}$$
Sunny owns 100% of Sun de Sud, a foreign corporation operating a business in Country M and paying foreign income tax at a 50% rate. Sunny paid $124,000 foreign income tax to Country L, $203,000 income tax to Country Q, and no foreign withholding tax on its Sun de Sud dividends. Assuming a 34% tax rate, compute Sunny's U.S. tax.

Question

Sunny, a California corporation, earned the following income this year. 
$$\begin{array} { l r } 
\text { U.S. source income } & \$ 557,000 \
\text { Foreign source income from Country L branch } & 337,900 \
\text { Foreign source income from Country Q branch } & 965,100 \
\text { Dividends from Sun de Sud } & 400,000
\end{array}$$ 
Sunny owns 100% of Sun de Sud, a foreign corporation operating a business in Country M and paying foreign income tax at a 50% rate. Sunny paid $124,000 foreign income tax to Country L, $203,000 income tax to Country Q, and no foreign withholding tax on its Sun de Sud dividends. Assuming a 34% tax rate, compute Sunny's U.S. tax.

Quizplus · Accepted Answer

The Answer of Sunny, a California corporation, earned the following income this year. 
$$\begin{array} { l r } 
\text { U.S. source income } & \$ 557,000 \
\text { Foreign source income from Country L branch } & 337,900 \
\text { Foreign source income from Country Q branch } & 965,100 \
\text { Dividends from Sun de Sud } & 400,000
\end{array}$$ 
Sunny owns 100% of Sun de Sud, a foreign corporation operating a business in Country M and paying foreign income tax at a 50% rate. Sunny paid $124,000 foreign income tax to Country L, $203,000 income tax to Country Q, and no foreign withholding tax on its Sun de Sud dividends. Assuming a 34% tax rate, compute Sunny's U.S. tax.

Sunny, a California Corporation, Earned the Following Income This Year