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(Solved): QUESTION 25Fire Inc., a US corporation, owns 100% of Ice, Inc. a foreign corporation. Fire has owned ...



QUESTION 25

Fire Inc., a US corporation, owns 100% of Ice, Inc. a foreign corporation. Fire has owned Ice for the last two years. Fire manufactures matches and sells the matches to Ice. Title passes outside of the US.

In 2020, Fire earned $10,000 of net income from sales to Ice. Also in 2020, Ice made a $10,000 cash distribution to Fire that is treated as a dividend.

Based on these facts, what is Fire’s taxable income for 2020?

a.$10,000
b.$0
c.$15,000
d.$20,000
e.none of the above


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Given data :

Fire Inc. owns 100% of Ice, Inc., a foreign corporation.
Fire manufactures matches and ...
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