In the instances provided in §§ 1.863-3 and 1.863-4 with respect to the activities described in (A), (B), and (C) of this subdivision, this section is applicable only in determining worldwide taxable income attributable to these activities.
Table 1 to Paragraph (f)(4)(ii)(A)
To gross income from domestic sales: $150,000x * ($1,000,000x/$1,500,000x) | $100,000x |
To gross income from foreign sales: $150,000x * ($500,000x/$1,500,000x) | 50,000x |
Total | 150,000x |
Table 2 to Paragraph (f)(4)(ii)(B)
To gross income from domestic sales: $150,000x * ($1,000,000x/$1,600,000x) | $93,750x |
To gross income from foreign sales: | |
$150,000x * ($600,000x/$1,600,000x) | 56,250x |
Total | 150,000x |
Table 3 to Paragraph (g)(19)(i)(A)
Personnel department expenses | $50,000x |
Training department expenses | 35,000x |
General and administrative expenses | 55,000x |
President's salary | 40,000x |
Sales manager's salary | 20,000x |
Total | 200,000x |
Table 4 to Paragraph (g)(19)(ii)(B)
Apportionment of the $200,000x expense to the statutory grouping of gross income: $200,000x * [$500,000x/($500,000x + $750,000x)] | $80,000x |
Apportionment of the $200,000x expense to the residual grouping of gross income: $200,000x * [$750,000x/($500,000x + $750,000x)] | 120,000x |
Total apportioned supportive expense | 200,000x |
Table 5 to Paragraph (g)(20)(ii)(B)
Apportionment of the $200,000x expense to the statutory grouping of gross income: | |
President's salary: $40,000x * 5% | $2,000x |
Sales manager's salary: $20,000x * 10% | 2,000x |
Remaining expenses: $140,000x * [$500,000x/($500,000x + $750,000x)] | 56,000x |
Subtotal: Apportionment of expense to statutory grouping | 60,000x |
Apportionment of the $200,000x expense to the residual grouping of gross income: | |
President's salary: $40,000x * 95% | 38,000x |
Sales manager's salary: $20,000x * 90% | 18,000x |
Remaining expenses: $140,000x * [$750,000x/($500,000x + $750,000x)] | 84,000x |
Subtotal: Apportionment of expense to residual grouping | 140,000x |
Total: Apportioned supportive expense | 200,000x |
Table 6 to Paragraph (g)(21)(ii)(B)
Apportionment of general and administrative expense to the statutory grouping, gross income from sources within the United States: $100,000x * [$200,000x/($200,000x + $400,000x + $400,000x)] | $20,000x |
Apportionment of general and administrative expense to the residual grouping, gross income from sources without the United States: $100,000x * [($400,000x + $400,000x)/($200,000x + $400,000x + $400,000x)] | 80,000x |
Total apportioned general and administrative expense | 100,000x |
Table 7 to Paragraph (g)(25)(ii)(B)
State income tax deduction apportioned to foreign source foreign branch category income (statutory grouping): $69,000x * ($150,000x/$950,000x) | $10,895x |
State income tax deduction apportioned to income from sources within the United States (residual grouping): $69,000x * ($800,000x/$950,000x) | 58,105x |
Total apportioned state income tax deduction | 69,000x |
Table 8 to Paragraph (g)(26)(ii)(B)(2)
States B and C income tax deduction apportioned to foreign source foreign branch category income (statutory grouping): $14,000x * ($150,000x/$400,000x) | $5,250x |
States B and C income tax deduction apportioned to income from sources within the United States (residual grouping): $14,000x * ($250,000x/$400,000x) | 8,750x |
Total apportioned state income tax deduction | 14,000x |
26 C.F.R. §1.861-8
For FEDERAL REGISTER citations affecting §1.861-8, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.