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 51

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following would not prevent an alien without a "green card" from being classified as a U.S.resident for income tax purposes?

A) The individual was in the United States to oversee her investments.
B) The individual was prevented from leaving the United States due to an illness which arose while in the United States.
C) The individual is a foreign consul assigned to the United States.
D) The individual commutes daily from Mexico to the United States to work.

E) A) and D)
F) A) and C)

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

An advance pricing agreement (APA) is an agreement between:

A) The taxpayer and the IRS.
B) Two related taxpayers.
C) Two or more governments.
D) The IRS and U.S.taxing authorities.

E) C) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

Generally,accrued foreign taxes are:

If a foreign corporation's U.S.effectively connected earnings for the taxable year are $900,000 and its net equity has increased by $40,000,its DEA is $940,000.

BlueCo,a domestic corporation,incorporates its foreign branch in a § 351 exchange,creating GreenCo,a wholly owned foreign corporation.BlueCo transfers $200 in inventory (basis = $20) and $900 in land (basis = $950) to GreenCo.GreenCo uses these assets in carrying on a trade or business outside the United States.What gain,if any,is recognized as a result of this transaction?

The U.S.system for taxing income earned inside its borders by non-U.S.persons is referred to as inbound taxation because such foreign persons are earning income by coming into the United States.

USCo,a domestic corporation,receives $100,000 of foreign-source income in the general limitation income category and $40,000 of foreign-source income in the passive income category.Worldwide taxable income is $1,200,000 and the U.S.tax liability before FTC is $420,000.Foreign taxes attributable to the general limitation income are $60,000 and to the passive income are $4,000.What is USCo's foreign tax credit for the tax year?

Section 482 is used to:

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

Discuss the primary purposes of income tax treaties.

BoxCo,Inc. ,a domestic corporation,owns 10% of the stock of X and of Y,two foreign corporations that are not CFCs and pay no foreign taxes.Both X and Y earn only general limitation income.During the current year,BoxCo,Inc.receives dividend income of $50,000 from X and $80,000 from Y for the tax year (all from post-2003 E & P) .BoxCo's total taxable income for the current year is $730,000.Foreign withholding taxes of $49,000 ($5,000 on the X dividend and $44,000 on the Y dividend) and U.S.taxes of $248,200 (before FTC) are levied.What is BoxCo's allowed foreign tax credit?

FLCo,a U.S.corporation,has $250,000 interest expense for the tax year.None of the interest relates to nonrecourse debt or loans from affiliated corporations.FLCo's U.S.and foreign assets are as follows. How should FLCo assign its interest expense between U.S.and foreign sources to maximize its FTC for the current year?

U.S.taxpayers may take a current FTC equal to the lesser of the FTC limit or the actual foreign taxes (direct or indirect).

Twelve unrelated U.S.persons own a foreign corporation equally.The foreign corporation is a CFC.

Dividends received from Shamrock,Ltd. ,an Irish corporation that earns 40% of its income from U.S.business activities,are foreign-source income.

Without the foreign tax credit,double taxation would result when:

Discuss the policy reasons for the § 367 cross-border transfer rules.Provide two examples of transactions to which § 367 would apply.

All losses are apportioned against U.S.-source income.

A controlled foreign corporation (CFC) realizes Subpart F income from:

Income tax treaties may provide for higher withholding tax rates on interest income than the rate provided under U.S.statutory law.