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USAco, a domestic corporation, owns 100% of FORco, a country F corporation. In
its first year of operations, FORco earns $100,000 of income, pays $30,000 of
country F income taxes, and distributes a dividend of $70,000 to USAco. If USAco
claims a deemed paid credit for the foreign income taxes attributable to the
$70,000 dividend, USAco will report income of:
(a) $100,000.
(b) $60,000.
(c) $40,000.
(d) $0.

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