Problem
Seabreeze Resorts, a U.S. corporation, operates resort hotels in many countries of the Caribbean, but does not operate in the U.S. By the end of 2014, Seabreeze owned properties in various foreign countries with an adjusted basis of $10,000,000 and a value of $30,000,000. In April 2015, Seabreeze acquired 100% of Paradise Co. ("Paradise"), an Islandian corporation for $80,000,000. Paradise held non-business portfolio assets valued at $10,000,000, equipment used in a U.S. trade/business valued at $15,000,000 and U.S. real property valued at $55,000,000. In January 2016, Casino, a citizen and resident of Islandia and a shareholder of Seabreeze, realized a profit of $1,000,000 from the sale of shares in Seabreeze.
Is the gain realized by Casino subject to U.S. income tax? If so, how would the income be taxed (assume the value of the assets remained unchanged from 2014 until 2016)?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.