SunCo, a domestic corporation, owns a number of patents related to designing sunglasses.SunCo licenses these patents to unrelated parties.SpainCo, a Spanish corporation, paid SunCo $78,000 in royalties related to these licenses.SpainCo uses the patent information in its manufacturing process in its Texas plant.WiscCo, a domestic corporation, paid SunCo $32,000 in royalties related to the licenses.WiscCo uses the patent information in its manufacturing process in its Germany manufacturing plant.How much U.S.-source royalty income did SunCo earn from these licenses?

Question

Quizplus · Accepted Answer

Only the royalties paid by SpainCo ($78,000) are considered U.S.-source income since SunCo is a domestic corporation. The royalties paid by WiscCo ($32,000) are not relevant to determining U.S.-source income. Therefore, SunCo earned $78,000 in U.S.-source royalty income.

SunCo, a Domestic Corporation, Owns a Number of Patents Related