Beach,Inc. ,a domestic corporation,owns 100% of Mountain,Ltd. ,a manufacturing facility in Ireland.Mountain has no operations or activities in the United States.The U.S.tax rate is 35% and the Irish tax rate is 10%.For the current year,Beach earns $500,000 in taxable income.Mountain earns $300,000 in taxable income from its operations,pays $30,000 in taxes to Ireland,and makes no distributions to Beach.What is Beach's effective tax rate for book purposes assuming Beach makes the permanent reinvestment assumption of ASC 740-30 (APB 23) ?
A) 38.75%.
B) 31.25%.
C) 35%.
D) 25.63%.
E) None of the above.
Correct Answer:
Verified
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