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USAco’s only item of gross income is $100,000 from sales of widgets in the United States. Its only expense is a $60,000 interest payment to its parent, FORco, its country F parent. The tax treaty between the U.S. and country F exempts interest payments fr

USAco’s only item of gross income is $100,000 from sales of widgets in the United States. Its only expense is a $60,000 interest payment to its parent, FORco, its country F parent. The tax treaty between the U.S. and country F exempts interest payments from withholding tax. If USAco’s debt to equity ratio exceeds 1.5 to 1, the amount of interest that USAco can deduct is:

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USAco’s only item of gross income is $100,000 from sales of widgets in the United States. Its only expense is a $60,000 interest payment to its parent, FORco, its country F parent. The tax treaty between the U.S. and country F exempts interest payments fr
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