ExpertMedium1 markMultiple Choice
CPA · Question 41 · Area 3: Entity Tax Compliance
A US C Corporation has Global Intangible Low-Taxed Income (GILTI) of $100,000. What is the effective deduction allowed for GILTI (assuming sufficient taxable income)?
A US C Corporation has Global Intangible Low-Taxed Income (GILTI) of $100,000. What is the effective deduction allowed for GILTI (assuming sufficient taxable income)?
Answer options:
A.
100% ($100,000)
B.
50% ($50,000)
C.
37.5% ($37,500)
D.
0%
How to approach this question
1. Identify Income Type: GILTI.<br/>2. Identify Deduction Section: IRC §250.<br/>3. Rate: 50% of GILTI amount (for tax years beginning before 2026).<br/>4. Result: $50,000.
Full Answer
B.50% ($50,000)✓ Correct
B
Under Section 250, corporations are allowed a deduction equal to 50% of their GILTI inclusion (and 37.5% of FDII).
Common mistakes
Confusing GILTI deduction rate with FDII rate.
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