_____ a Foreign Subsidiary Located in Ireland Reported Net Income

Multiple Choice

_____ A foreign subsidiary located in Ireland reported net income of $90,000 (translated) to its parent for 2006. Assume that Ireland has a 10% income tax rate and a 10% dividend withholding tax. The U.S. income tax rate is 40%. On 12/31/06, the foreign subsidiary declared and paid a dividend equal to its entire 2006 net income. As a result, how much income tax will the parent pay in the United States for 2006?

A) $ -0-
B) $17,000
C) $20,000
D) $21,000
E) $30,000