Hazelton Corporation,a U

Short Answer

Hazelton Corporation,a U.S.corporation,manufactures golf equipment.Hazelton reported sales from this product group of $100 million,of which $40 million were foreign source sales.The gross profit percentage for domestic sales was 20%,and the gross profit percentage from foreign sales was 30%.Hazelton incurred R&E expenses of $10 million,all of which were conducted in the United States.What is the minimum amount of the R&E expense that can be apportioned to foreign source gross income for foreign tax credit purposes,assuming the company can elect either apportionment method?