Business College

Windmill Corporation,a Dutch corporation,is owned by the following unrelated persons: 50 percent by a U.S.corporation,5 percent by a U.S.individual,and 45 percent by a Swiss corporation.During the year,Windmill earned $2,000,000 of subpart F income.Which of the following statements is true about the application of subpart F to the income earned by Windmill?
A) Windmill is a CFC and the U.S. corporation and U.S. individual will have a deemed dividend of $1,000,000 and $100,000, respectively.
B) Windmill is a CFC and only the U.S. corporation will have a deemed dividend of $1,000,000.
C) Windmill is a CFC and the U.S. corporation, U.S. individual, and Swiss corporation will have a deemed dividend of $1,500,000, $100,000, and $900,000, respectively.
D) Windmill is not a CFC and none of the shareholders will have a deemed dividend under subpart F.

Answers

Answer 1

Answer: Windmill is not a CFC and none of the shareholders will have a deemed dividend under subpart F.

Explanation:

Subpart F income include insurance income, illegal bribes, foreign base company income, international boycott factor income, etc.

It should be noted that Windmill isn't a controlled foreign corporation that is the company isn't a corporate entity which is duly registered and then conducts business in another country that's different from its home country. Therefore, none of the shareholders will have a deemed dividend under subpart F.

Related Questions

Hershberger's Farms plans to mix two types of food to make a mix of low cost feed for the animals in his farm. A bag of food costs $10 and contains 40 units of protein, 20 units of minerals and 10 units of vitamins. A bag of food B costs $12 and contains 30 units of proteins, 20 units of minerals and 30 units of vitamins. Daily minimum requirements consist of 150 units of proteins, 90 units of minerals and 60 units of vitamins.
a. Based on the lowest possible cost, how many bags of food A and food B should be consumed by the animals each day?
b. What is the overall cost? $46.50
c. Was there any unused resources?

Answers

Answer:

Following are the  responses to the given choices:

Explanation:

For point a:

It is possible to say that as the material unit in either bag are same, the minimum bag number is 90 /20 = 4.5

rounded off=Minimum 5 bags

They will try to use all of these bags as the cost of bag A is poor.

When we have five bags of protein A, therefore the vitamin requirements were n’t fulfilled.

Currently, using 4 bags of A and 1 B bag, protein, vitamin and mineral obligations are fulfilled. They all are met.

Therefore, 4 food bags A and 1 food bag B need to be consumed due to the lowest cost.

For point b:

Cost total:

[tex]=( 4 \times 10 ) + ( 1 \times 12)\\\\=40 +12\\\\= \$52[/tex]

For point c:

The following are unused resources:

[tex]\text{Protein = Bag A + Bag B - Consumption}\\\\= 160 + 30 - 150\\\\=190-150\\\\= 40\\\\Minerals = 10 \\\\vitamins = 10[/tex]

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