Goolsbee, Inc Goolsbee Incurs Interest Expense of $200,000

Essay

Goolsbee, Inc., a U.S. corporation, generates U.S.-source and foreign-source gross income. Goolsbee's assets (tax basis) are as follows. $\begin{array}{lr}\text { Generating U.S.-source income } & \$ 15,000,000 \\\text { Generating foreign-source income } & 25,000,000 \\\text { Total } & \$ 40,000,000\end{array}$ Goolsbee incurs interest expense of $200,000. Apportion interest expense to foreign-source income.