Boomerang Corporation, a New Zealand Corporation, Is Owned by the Following

Multiple Choice

Boomerang Corporation, a New Zealand corporation, is owned by the following unrelated persons: 40 percent by a U.S. corporation, 15 percent by a U.S. individual, and 45 percent by an Australian corporation. During the year, Boomerang earned $3,800,000 of subpart F income. Which of the following statements is true about the application of subpart F to the income earned by Boomerang?

A) Boomerang is a CFC and the U.S. corporation and U.S. individual will have a deemed dividend of $1,520,000 and $570,000, respectively.
B) Boomerang is a CFC and only the U.S. corporation will have a deemed dividend of $1,520,000.
C) Boomerang is a CFC and the U.S. corporation, U.S. individual, and Australian corporation will have a deemed dividend of $1,520,000, $570,000, and $1,710,000, respectively.
D) Boomerang is not a CFC and none of the shareholders will have a deemed dividend under subpart F.