Deductible interest expense incurred by a U.S. corporation will always be treated as a U.S. source deduction.
Interest expense is sourced based on the type of income generated by the corporation's assets, which could be U.S. or foreign.

Question

Quizplus · Accepted Answer

Interest expense is sourced based on the type of income generated by the corporation's assets, which could be U.S. or foreign. Therefore, deductible interest expense incurred by a U.S. corporation may be treated as foreign source deduction if it is related to foreign income generated by the corporation's assets.

Deductible Interest Expense Incurred by a U