Dividends received from Murdock Corp., a corporation organized in Sustenato that earns 70% of its income from
U.S. business activities, are 70% U.S.-source income.

Question

Quizplus · Accepted Answer

Dividends received from a foreign corporation are considered foreign source income unless the corporation earns more than 50% of its income from U.S. business activities. In this case, Murdock Corp. earns 70% of its income from U.S. business activities, so the dividends received are considered 70% U.S.-source income.

Dividends Received from Murdock Corp