Assignment task:
Webco, a U.S. website operator, sells all of its online content to ForeignCo, a foreign corporation, which will use the content in its Country X website. This content was never subject to an allowance for amortization. The sales price is $100 for every 10,000 page views in each of the next three years. In each of the 3 years ForeignCo has 10 million page views per year, and pays Webco $100,000 per year. There is no tax treaty between the United States and Country X. Which one of the following best describes the sourcing of the income, under U.S. tax law? Select one: a. The payments will likely be treated as income from the sale of an intangible, and as such will be sourced in the United States. b. The payments will likely be treated as income from the sale of an intangible, and as such will be sourced in Country X. c. The payments will likely be treated as royalties, and sourced in the United States. d. The payments will likely be treated as royalties, and sourced in Country X.