Oasis Co., a U.S. shareholder, owns 100% of Shack Co. and 100% of Studio Co., both CFCs. Shack Co. has $300,000 of gross income, of which $50,000 is effectively connected income, and $30,000 is interest expense without any allocable interest income. Shack Co. has $500,000 of machinery used in its trade or business. Studio Co. has a $150,000 loss and machinery worth $1,000,000 used in its operations. a. What is GILTI for Oasis Co.? 150,000 X b. What impact do the operations of Shack Co. and Studio Co. have on Oasis Co.'s U.S. taxable income? Oasis must include $ 0 X of GILTI in its U.S. taxable income, but will also get a deduction for 50% 0 X. inclusion. As a result, its taxable income will increase by $ of its GILTI
Oasis Co., a U.S. shareholder, owns 100% of Shack Co. and 100% of Studio Co., both CFCs. Shack Co. has $300,000 of gross income, of which $50,000 is effectively connected income, and $30,000 is interest expense without any allocable interest income. Shack Co. has $500,000 of machinery used in its trade or business. Studio Co. has a $150,000 loss and machinery worth $1,000,000 used in its operations. a. What is GILTI for Oasis Co.? 150,000 X b. What impact do the operations of Shack Co. and Studio Co. have on Oasis Co.'s U.S. taxable income? Oasis must include $ 0 X of GILTI in its U.S. taxable income, but will also get a deduction for 50% 0 X. inclusion. As a result, its taxable income will increase by $ of its GILTI
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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SHJ.8
Transcribed Image Text:Oasis Co., a U.S. shareholder, owns 100% of Shack Co. and 100% of Studio Co., both CFCs. Shack Co. has $300,000 of gross income, of
which $50,000 is effectively connected income, and $30,000 is interest expense without any allocable interest income. Shack Co. has
$500,000 of machinery used in its trade or business. Studio Co. has a $150,000 loss and machinery worth $1,000,000 used in its
operations.
a. what is GILTI for Oasis Co.?
150,000 X
b. What impact do the operations of Shack Co. and Studio Co. have on Oasis Co.'s U.S. taxable income?
Oasis must include $
0 X of GILTI in its U.S. taxable income, but will also get a deduction for 50%
inclusion. As a result, its taxable income will increase by $
0 X.
of its GILTI
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