Wellington, Inc, a U.S. corporation, owns 30% of a CFC that has $50 million of earnings and profits for the current year. Included in that amount is $20 million of Subpart F income. Wellington has been a CFC for the entire year and makes no distributions in the current year. Wellington must include in gross income (before any § 78 gross-up):
a. $0.
b. $6 million.
c. $20 million.
d. $50 million.
b
RATIONALE: $6 million ($20 million Subpart F income × 30% ownership interest).
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Accepting a special order will improve overall net operating income if the revenue from the special order exceeds:
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DFD guideline______________________________states: Include within the system context any entity that performs one or more information processing activities.
Fill in the blank(s) with the appropriate word(s).