48 Subpart F Inclusions 2 DC owns CFC a country A corporatio

4-8 Subpart F Inclusions 2

DC owns CFC, a country A corporation. For the current year, CFC has $100 of foreign source interest income from an unrelated FC. CFC also has $50 of foreign source GL income. CFC\'s pays $90 of interest to DC during the year. For the year, CFC paid $18 of Country A taxes. What are the tax consequences to DC for the current year?

Solution

DC has to include interest income from the foreign subsidiary in its total income.