FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 25: Taxation of International Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Dividends received from a domestic corporation are totally U.S.source:

A) If the corporation earns at least 80% of its gross income over the immediately preceding three tax years from the active conduct of a U.S.trade or business.
B) If the corporation earns at least 25% of its gross income over the immediately preceding three tax years from the active conduct of a U.S.trade or business.
C) Unless the corporation earns at least 80% of its gross income over the immediately preceding three tax years from the active conduct of a foreign trade or business.
D) Unless the corporation earns at least 25% of its gross income over the immediately preceding three tax years from the active conduct of a foreign trade or business.
E) In all of the above cases.

F) A) and D)
G) C) and D)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Shannon, a foreign person with a green card, spends the following days in the United States. Shannon's residency status for 2014 is:

A) U.S.resident because she has a green card.
B) U.S.resident since she was a U.S.resident for the past immediately preceding two years.
C) Not a U.S.resident because Shannon was not in the United states for at least 31 days during 2014.
D) Not a U.S.resident since, using the three-year test, Shannon is not present in the United states for at least 183 days.

E) B) and C)
F) A) and B)

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Which of the following is a special tax regime imposed on certain foreign persons engaged in a U.S.trade or business?

The U.S.system for taxing income earned outside its borders by U.S.persons is referred to as the territorial approach, because only income earned within the U.S.border is subject to taxation.

Which of the following is not a specific separate income "basket" for purposes of the foreign tax credit limitation calculation?

Performance, Inc., a U.S.corporation, owns 100% of Krumb, Ltd., a foreign corporation.Krumb earns only general basket income.During the current year, Krumb paid Performance a $200,000 dividend.The foreign tax credit associated with this dividend is $30,000.The foreign jurisdiction requires a withholding tax of 30%, so Performance received only $140,000 in cash as a result of the dividend.What is Performance's total U.S.gross income reported as a result of the $140,000 cash received?

OutCo, a controlled foreign corporation owned 100% by USCo, earned $900,000 in Subpart F income for the current year.OutCo's current year E & P is $250,000 and its accumulated E & P is $18 million.What is the current year Subpart F deemed dividend to USCo?

Which of the following statements regarding the sourcing of gross income is true?

ForCo, a foreign corporation not engaged in a U.S.trade or business, recognizes a $3 million gain from the sale of land located in the United States.The amount realized on the sale was $50 million.Absent any exceptions, what is the required withholding amount on the part of the purchaser of this land?

Which of the following determinations does not require knowing the amounts of one's U.S.- versus foreign-source income?

Which of the following statements regarding the translation of foreign income taxes is true?

Fulton, Ltd., a foreign corporation, operates a U.S.branch that reports effectively connected U.S.earnings and profits (after income taxes) of $800,000 for the tax year.The branch's U.S.net equity at the beginning of the tax year is $2 million and at the end of the tax year is $1.5 million.Fulton is organized in a nontreaty country.Fulton's dividend equivalent amount for the year is:

A U.S.taxpayer may take a current FTC equal to the greater of the FTC limit or the actual foreign taxes (direct or indirect) paid or accrued.

Krebs, Inc., a U.S.corporation, operates an unincorporated branch manufacturing operation in the U.K.Krebs, Inc., reports $900,000 of taxable income from the U.K.branch on its U.S.tax return, along with $1,600,000 of taxable income from its U.S.operations.The U.K.branch income is all general limitation basket income.Krebs paid $270,000 in U.K.income taxes related to the $900,000 in branch income. Assuming a U.S.tax rate of 35%, what is Krebs' U.S.tax liability after any allowable foreign tax credits?

U.S.income tax treaties:

USCo, a domestic corporation, reports worldwide taxable income of $500,000, including a $100,000 dividend from ForCo, a wholly-owned foreign corporation.ForCo's undistributed earnings and profits are $1 million and it has paid $200,000 of foreign income taxes attributable to these earnings.What is USCo's deemed paid foreign tax credit related to the dividend received (before consideration of any limitation) ?

Match the definition with the correct term.Not all of the terms have a match. A definition can be used more than once.

The following income of a foreign corporation is not subject to the regular U.S.corporate income tax rates.

Goolsbee, Inc., a domestic corporation, generates U.S.-source and foreign-source gross income.Goolsbee's assets (tax book value) are as follows. Goolsbee incurs interest expense of $200,000.Using the asset method and the tax book value, apportion interest expense to foreign-source income.

The United States has in force income tax treaties with about 70 countries.