WaterCo, a domestic corporation, purchases inventory for resale from unrelated distributors outside the United States and resells this inventory to customers inside the United States with title passing inside the United States. What is the source of WaterCo's inventory sales income?

Question

Quizplus · Accepted Answer

WaterCo's inventory sales income is considered 100% U.S. source because the inventory is sold to customers inside the United States with title passing inside the United States. The fact that the inventory is purchased from unrelated distributors outside the United States is irrelevant in determining the source of income.

WaterCo, a Domestic Corporation, Purchases Inventory for Resale from Unrelated