During the Current Year, USACo (A Domestic Corporation) Sold Equipment

Multiple Choice

During the current year, USACo (a domestic corporation) sold equipment to FrenchCo, a non-U.S. corporation, for $350,000 with title passing to the buyer in France. USACo purchased the equipment several years ago for $100,000 and took $80,000 of depreciation deductions on the equipment, all of which were allocated to U.S.-source income. USACo's adjusted basis in the equipment is $20,000 on the date of sale. What is the sourcing of the $330,000 gain on the sale of this equipment?

A) $330,000 foreign source.
B) $330,000 U.S. source.
C) $250,000 foreign source and $80,000 U.S. source.
D) $250,000 U.S. source and $80,000 foreign source.