Substantial valuation misstatement penalty


USAco, a domestic corporation, owns all of the stock of FSubco, a foreign corporation. FSubco manufactures widgets and sells them at a price of $100 to USAco, which then resells the widgets to U.S. customers. USAco's gross receipts for the year are $200 million. Under what circumstances would USAco be potentially subject to the Code Sec. 6662(e) substantial valuation misstatement penalty?

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Accounting Basics: Substantial valuation misstatement penalty
Reference No:- TGS0513460

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