The following persons own Schlecht Corporation,a non-U.S.entity.

None of the shareholders are related.Subpart F income for the tax year is $300,000.No distributions are made.Which of the following statements is correct?

Question

The following persons own Schlecht Corporation,a non-U.S.entity.
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None of the shareholders are related.Subpart F income for the tax year is $300,000.No distributions are made.Which of the following statements is correct?

Quizplus · Accepted Answer

Based on the information provided, we cannot determine whether Schlecht is a CFC or not without knowing the ownership of the corporation. However, we know that Marina is not a U.S. shareholder for CFC purposes. Therefore, choice C is the correct answer.

Choice A cannot be determined based on the given information.

Choice B is incorrect because Chee would be required to include only his proportionate share of Subpart F income in his gross income, which would be based on his ownership percentage in Schlecht.

Choice D is incorrect because Marina's gross income would be based on her proportionate share of Subpart F income, which would be based on her ownership percentage in Schlecht, and not a fixed amount of $24,000.

The Following Persons Own Schlecht Corporation,a Non-U.S.entity