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Problem 1: USAco, a domestic corporation, manufactures merchandise in the U.S. that it then sells in Canada. Title passes in Canada. The gross profit from these sales is:
Option (a) foreign-source because title passes in Canada.
Option (b) U.S.-source because the seller is a domestic corporation.
Option (c) U.S.-source because the merchandise was manufactured in the U.S.
Option (d) sourced under the 50-50 method.
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