Do any of the following corporations as a CFC (explain your answer)? A.Two U.S.

Question

Do any of the following corporations as a CFC (explain your answer)?

A.Two U.S. persons each owes 25% of F, a foreign corporation, with foreign persons owning the remainder.

B. One hundred related U.S. persons each owns 1% of F,

C.One U.S. person owns 48% of F, a second U.S. person owns 2% of F and foreign persons own the remaining 50%

2.Miguel a foreign person is sent to the United states to work in the Wholly-owned U.S. subsidiary of Amigo, Inc. a foreign corporation, During 2017, Miguel was present in the U.S. for 50 days. During 2016, he was present in the U.S. for 300 days. What is his U.S. tax filing obligation for 2017 and 2016?

3.Able Inc manufacturers car batteries in the United States. Able owns 100% of San Paulo Inc. a corporation incorporated in Brazil. During 2017 San Paulo purchased $10 miliion of batteries. $9.2 million of the batteries were sold to customers in Brazil and $800,000 to customers in Argentina. Will subpart of F apply in this situation?

Explanation / Answer

A. A Controlled Foreign Corporation is any corporation organized outside the U.S. (a foreign corporation) that is more than 50% owned by U.S. Shareholders. - In this case US shareholders own 50% only hence does not fall under the category of CFC.

B. US shareholders owns 100% of foreign corporation hence falls under the category of CFC.

C. US shareholders does not owns more than 50% of foreign corporation hence does not falls under the category of CFC.

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