ForCo, a foreign corporation, receives interest income of $50,000 from USCo, an unrelated domestic corporation. USCo has historically earned 79% of its gross income from active foreign-source business income. What amount of ForCo's interest income is U.S.-source?

Question

Quizplus · Accepted Answer

Interest income is generally sourced to the residence of the payer. Since USCo is a domestic corporation, the entire $50,000 interest income is U.S.-source.

ForCo, a Foreign Corporation, Receives Interest Income of $50,000 from USCo