Which of the Following Statements Concerning the Sourcing of Income

Multiple Choice

Which of the following statements concerning the sourcing of income from inventory produced by the taxpayer in the U.S.and sold outside the U.S.is true?

A) If title passes on the inventory outside the U.S., all of the inventory income is foreign source.
B) Because the inventory is manufactured in the U.S., all of the inventory income is U.S.source.
C) The taxpayer may use the 50-50 method to source one-half the income based on title passage and one-half the income based on location of production assets.
D) The taxpayer may use the 50-50 method to source one-half the income based on title passage and one-half the income based on where the sale negotiation takes place.