Calculate USAco US tax liability

Reference no: EM131814198

Question: USAco, a domestic corporation, manufactures and sells widgets worldwide. USAco earns $100,000 of U.S.-source income from sales in the U.S., $100,000 of foreign source income from sales in Hong Kong, and $100,000 of foreign-source income from sales in Canada. The U.S. tax rate is 35%, the Hong Kong tax rate is 20%, and the Canadian tax rate is 40%. Calculate USAco's U.S. tax liability. Would your answer change if instead of selling widgets in Canada, USAco derived Canadian-source passive income that is subject to Canadian tax?

Reference no: EM131814198

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