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

Question

Quizplus · Accepted Answer

The sourcing of AirCo's inventory sales income is considered 100% foreign source because the title to the goods passes to the buyer outside the United States. According to U.S. tax principles, the source of income from the sale of inventory is generally determined by the location where title passes.

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