What are the us tax consequences of teny

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Question - Tenco, a domestic corporation, manufactures tennis rackets for sale in the United States and abroad. Tenco owns 100% of the stock of Teny, a foreign sales subsidiary that was organized in Year 1. During Year 1, Teny had $15 million of foreign base company sales income, paid $1 million in foreign income taxes, and distributed no dividends. During Year 2, Teny had no earnings and profits, paid no foreign income taxes, and distributed a $14 million dividend.

Assuming the U.S. corporate tax rate is 21%, what are the U.S. tax consequences of Teny's Year 1 and Year 2 activities?

Reference no: EM133179739

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