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Caragua Corporations foreign subsidiaries generated aggregate before-tax income of $ 42,000,000 in the current year,...

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Accounting

Caragua Corporations foreign subsidiaries generated aggregate before-tax income of $ 42,000,000 in the current year, upon which they paid corporate income tax at an average rate of 15 percent. Caraguas foreign subsidiaries had an aggregate amount of property, plant, and equipment of $ 280,000,000.

Required:

a. Determine the amount of global intangible low-taxed income (GILTI) Caragua was required to report in its U.S. taxable income in the current year.

b. Determine the amount of U.S. tax liability related to GILTI in the current year.

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