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What the interest income is

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Problem 1: USAco, a domestic corporation, loans $100,000 to Toni, a U.S. citizen and resident. Interest of $10,000 is payable annually on December 31 of each year. Toni is physically present in Mexico on December 31, 20Y2 when he pays the interest. What The interest income is:

Option (a) U.S.-source because USAco is a domestic corporation.

Option (b) U.S.-source because Toni is a U.S. resident.

Option (c) sourced under the 50-50 method.

Option (d) foreign-source because Toni is physically present in Mexico on December 31 when the interest is paid.

Reference no: EM132476499

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