Cordeio, Inc. is a controlled foreign corporation (CFC) for the entire tax year. Yancy Company, a...

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Cordeio, Inc. is a controlled foreign corporation (CFC) for theentire tax year. Yancy Company, a U.S. corporation, owns 70% ofCordeio's one class of stock for the entire year. Subpart F incomeis $470,000, and no distributions have been made during the year.Both entities use the calendar tax year.
Assume a 365-day year and not a leap year. Round anydivision to six decimal places and use in subsequent computations.Round your final answers to the nearest dollar.
a. What amount does Yancy include in grossincome as a constructive dividend for the tax year?
$
b. Assume that Cordeio is a CFC until March 1of the calendar tax year. What amount does Yancy include in grossincome as a constructive dividend for the tax year?
$

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It is a concept in US taxation in which various distributions to shareholders are not labeled as dividends but are still considered dividends by the IRS and taxed as such Constructive dividends are most commonly found in companies in which the employees See Answer

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