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:

100% ($100,000)

50% ($50,000)

37.5% ($37,500)

How to approach this question

1. Identify Income Type: GILTI. 2. Identify Deduction Section: IRC §250. 3. Rate: 50% of GILTI amount (for tax years beginning before 2026). 4. Result: $50,000.

Full Answer

B.50% ($50,000)✓ Correct

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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