USAco, a domestic corporation, manufactures widgets for sale in the United States. USAco owns 100% of the stock of FORco, a foreign manufacturing and sales subsidiary. In 2017, FORco had $30 million of income from the manufacturing and sale of widgets in Europe and paid $3 million in foreign income taxes. FORco distributed no dividends. In October of the 2017, FORco loaned $10.8 million to USAco. Required:
a. What are the U. S. tax consequences (if any) to USAco?
b. How would you answer to part (a) change if the year is 2020?

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.