Chester, Inc., a U.S. multinational, earned $4 million this year from both domestic and international operations. Of this amount, $1.3 million qualifies as foreign-derived intangible income (FDII). If Chester pays no foreign income tax, compute its U.S. income tax liability.

A. $170,625
B. $840,000
C. $737,625
D. $567,000


Answer: C

Business

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