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Sara Jones, a brilliant U.S. citizen who developed a unique and healthy way...

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Accounting

Sara Jones, a brilliant U.S. citizen who developed a unique and healthy way to lose weight quickly, is encouraged by her dear friend in Country X to open a Country X business as soon as possible because the citizens and residents of Country X are among the most overweight people in the world! In a hurry to get her business started back in early 2023 and to own an entity that shielded her from any legal liability, Sara formed a Country X corporation, Fat Loss, Inc., which for U.S. tax purposes is a per se corporation. Country X has no income tax treaty with the United States. For 2023, Fat Loss, Inc. generated pre-tax Country X net income of $1,000,000 and paid the Country X corporate income tax rate of 30%. On January 4,2024, Fat Loss, Inc. paid Sara a dividend of $700,000. Sara is in the 37% income tax bracket. After considering the qualified dividend income rules and the foreign tax credit rules, Sara will owe the U.S. how much in U.S. income tax: (FOR PURPOSES OF THIS EXAMPLE, DISREGARD THE NET INVESTMENT INCOME TAX).
Group of answer choices
$70,000
$0.00
$140,000
$259,000

Answer & Explanation Solved by verified expert
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