Question 1

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

Accepted Answer

A) Calculation of a U.S. person's total taxable income. 
B) Calculation of U.S. withholding tax on the FDAP income of foreign persons. 
C) Calculation of the foreign earned income exclusion. 
D) Calculation of a foreign person's income effectively connected with carrying on a U.S. trade or business. 
A) Calculation of a U.S. person's total taxable income. 
B) Calculation of U.S. withholding tax on the FDAP income of foreign persons. 
C) Calculation of the foreign earned income exclusion. 
D) Calculation of a foreign person's income effectively connected with carrying on a U.S. trade or business. A

Question 2

Dividends received from Murdock Corp., a corporation organized in Sustenato that earns 70% of its income from U.S. business activities, are 70% U.S.-source income.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following statements is true, regarding the sourcing of dividend income?

Accepted Answer

A) Dividends are sourced based on the residence of the recipient. 
B) Dividends from non-U.S. corporations are always foreign source. 
C) Dividends from non-U.S. corporations are foreign-source only to the extent that 80% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a non-U.S. trade or business. 
D) A percentage of dividends from non-U.S. corporations are U.S. source to the extent that 25% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a U.S. trade or business. 
A) Dividends are sourced based on the residence of the recipient. 
B) Dividends from non-U.S. corporations are always foreign source. 
C) Dividends from non-U.S. corporations are foreign-source only to the extent that 80% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a non-U.S. trade or business. 
D) A percentage of dividends from non-U.S. corporations are U.S. source to the extent that 25% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a U.S. trade or business. D

Question 4

Match the definition with the correct term.
-A non-U.S. citizen who holds a "green card."

Accepted Answer

A) Expatriate 
B) Resident 
C) Nonresident alien 
D) U.S. trade or business 
E) Branch profits tax
F)Effectively connected income 
A) Expatriate 
B) Resident 
C) Nonresident alien 
D) U.S. trade or business 
E) Branch profits tax
F)Effectively connected income

Question 5

Waltz, Inc., a U.S. taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000. Waltz's worldwide taxable income is $450,000, on which it owes U.S. taxes of $157,500 before FTC. Waltz's FTC is $50,000.

Accepted Answer

A) True 
 B)False

Question 6

Given the following information, determine whether Greta, an alien, is a U.S. resident for Year 3. Greta cannot establish a tax home in or a closer connection to a foreign country. $$\begin{array} { l l } 
\text { Year } & \text { Number of days in the United States } \
3 & 120 \
2 & 150 \
1&240
\end{array}$$

Accepted Answer

In general, for Federal income tax purpo

Question 7

Twenty unrelated U.S. persons equally own all of the stock of Quigley, a foreign corporation. Quigley is a CFC.

Accepted Answer

A) True 
 B)False

Question 8

Match the definition with the correct term.
-Treasury powers over transfer pricing.

Accepted Answer

A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482 
A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482

Question 9

GoldCo, a U.S. corporation, incorporates its foreign branch in a § 351 exchange, creating GreenCo, a wholly owned foreign corporation. GoldCo transfers $200 in inventory (basis = $50) and $900 in land (basis = $950) to GreenCo. GreenCo uses these assets in carrying on a trade or business outside the U.S. What gain or loss, if any, does GoldCo recognize as a result of this transaction?

Accepted Answer

A) ($50) 
B) $0 
C) $100 
D) $150 
A) ($50) 
B) $0 
C) $100 
D) $150

Question 10

Jokerz, a CFC of a U.S. parent, generated $80,000 Subpart F foreign base company services income in its first year of operations. The next year, Jokerz distributes $50,000 cash to the parent, from those service profits. The parent is taxed on $0 in the first year (tax deferral rules apply) and $50,000 in the second year.

Accepted Answer

A) True 
 B)False

Question 11

GreenCo, a U.S. corporation, earns $25 million of taxable income from U.S. sources and $10 million of taxable income from foreign sources. What amount of taxable income does GreenCo report on its U.S. tax return?

Accepted Answer

A) $25 million. 
B) $35 million. 
C) $25 million less any tax paid on the foreign income. 
D) $35 million less any tax paid on U.S. income. 
A) $25 million. 
B) $35 million. 
C) $25 million less any tax paid on the foreign income. 
D) $35 million less any tax paid on U.S. income.

Question 12

Match the definition with the correct term.
-U.S. taxpayers earning income outside the United States.

Accepted Answer

A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482 
A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482

Question 13

A tax haven often is:

Accepted Answer

A) A country with high internal income taxes. 
B) A country with no or low internal income taxes. 
C) A country without income tax treaties. 
D) A country that prohibits "treaty shopping." 
A) A country with high internal income taxes. 
B) A country with no or low internal income taxes. 
C) A country without income tax treaties. 
D) A country that prohibits "treaty shopping."

Question 14

Match the definition with the correct term.
-Foreign taxpayers earning income inside the United States.

Accepted Answer

A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482 
A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482

Question 15

In 2014, George renounces his U.S. citizenship and moves to Fredonia, where income tax rates are very low. George is a multimillionaire and says he "has had it" with high Federal income taxes on wealthy individuals like himself. In 2017, George's U.S.-source income is $1.5 million. That income escapes Federal income taxes.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following determinations requires knowing the amount of one's foreign-source gross income?

Accepted Answer

A) Itemized deductions. 
B) Foreign tax credit. 
C) Calculation of a U.S. person's total taxable income. 
D) Calculation of a U.S. person's deductible interest expense. 
A) Itemized deductions. 
B) Foreign tax credit. 
C) Calculation of a U.S. person's total taxable income. 
D) Calculation of a U.S. person's deductible interest expense.

Question 17

Match the definition with the correct term.
-Individual who is not a U.S. citizen or resident.

Accepted Answer

A) Expatriate 
B) Resident 
C) Nonresident alien 
D) U.S. trade or business 
E) Branch profits tax
F)Effectively connected income 
A) Expatriate 
B) Resident 
C) Nonresident alien 
D) U.S. trade or business 
E) Branch profits tax
F)Effectively connected income

Question 18

Present, Inc., a U.S. corporation, owns 60% of the stock of Past, Inc., a foreign corporation. For the current year, Present receives a dividend of $80,000 from Past. Past's pools of E & P (after taxes) and foreign taxes are $4,000,000 and $500,000, respectively. What is Present's total gross income from this dividend if it elects to claim the FTC for deemed-paid foreign taxes?

Accepted Answer

Dividend income is "grossed up

Question 19

Match the definition with the correct term.
-Method for sourcing income and deductions.

Accepted Answer

A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482 
A) Inbound 
B) Outbound 
C) Allocation and apportionment 
D) Qualified business unit 
E) Tax haven
F)Income tax treaty
G)Section 482

Question 20

Chang, an NRA, is employed by Fisher, Inc., a foreign corporation. In November, Chang spends 10 days in the United States performing consulting services for Fisher's U.S. branch. She earns $5,000 per month. A month includes 20 workdays.

Accepted Answer

A) Chang has $2,500 U.S.-source income which is exempt from U.S. taxation, because she is in the U.S. for 90 days or less. 
B) Chang has $2,500 U.S.-source income which is exempt from U.S. taxation, because the amount paid to her is less than $3,000. 
C) Chang has $2,500 U.S.-source income, because her foreign employer has a U.S. branch. 
D) Chang has no U.S.-source income, under the commercial traveler exception. 
A) Chang has $2,500 U.S.-source income which is exempt from U.S. taxation, because she is in the U.S. for 90 days or less. 
B) Chang has $2,500 U.S.-source income which is exempt from U.S. taxation, because the amount paid to her is less than $3,000. 
C) Chang has $2,500 U.S.-source income, because her foreign employer has a U.S. branch. 
D) Chang has no U.S.-source income, under the commercial traveler exception.

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

Dividends received from Murdock Corp., a corporation organized in Sustenato that earns 70% of its income from U.S. business activities, are 70% U.S.-source income.

Which of the following statements is true, regarding the sourcing of dividend income?

Match the definition with the correct term. -A non-U.S. citizen who holds a "green card."

Waltz, Inc., a U.S. taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000. Waltz's worldwide taxable income is $450,000, on which it owes U.S. taxes of $157,500 before FTC. Waltz's FTC is $50,000.

Given the following information, determine whether Greta, an alien, is a U.S. resident for Year 3. Greta cannot establish a tax home in or a closer connection to a foreign country. Year Number of days in the United States 3 120 2 150 1 240

Twenty unrelated U.S. persons equally own all of the stock of Quigley, a foreign corporation. Quigley is a CFC.

Match the definition with the correct term. -Treasury powers over transfer pricing.

GreenCo, a U.S. corporation, earns $25 million of taxable income from U.S. sources and $10 million of taxable income from foreign sources. What amount of taxable income does GreenCo report on its U.S. tax return?

Match the definition with the correct term. -U.S. taxpayers earning income outside the United States.

A tax haven often is:

Match the definition with the correct term. -Foreign taxpayers earning income inside the United States.

Which of the following determinations requires knowing the amount of one's foreign-source gross income?

Match the definition with the correct term. -Individual who is not a U.S. citizen or resident.

Match the definition with the correct term. -Method for sourcing income and deductions.

Chang, an NRA, is employed by Fisher, Inc., a foreign corporation. In November, Chang spends 10 days in the United States performing consulting services for Fisher's U.S. branch. She earns $5,000 per month. A month includes 20 workdays.

Understanding and Working With the Federal Tax Law

Corporations Introduction and Operating Rules

Corporations Special Situations

Corporations Organization and Capital Structure

Corporations Earnings Profits and Dividend Distributions

Corporations Redemptions and Liquidations

Corporations Reorganizations

Consolidated Tax Returns

Partnerships Formation Operation and Basis

Partnerships Distributions Transfer of Interests and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 9: Taxation of International Transactions

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

Dividends received from Murdock Corp., a corporation organized in Sustenato that earns 70% of its income from U.S. business activities, are 70% U.S.-source income.

Which of the following statements is true, regarding the sourcing of dividend income?

Match the definition with the correct term. -A non-U.S. citizen who holds a "green card."

Waltz, Inc., a U.S. taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000. Waltz's worldwide taxable income is $450,000, on which it owes U.S. taxes of $157,500 before FTC. Waltz's FTC is $50,000.

Given the following information, determine whether Greta, an alien, is a U.S. resident for Year 3. Greta cannot establish a tax home in or a closer connection to a foreign country. Year Number of days in the United States 3 120 2 150 1 240

Twenty unrelated U.S. persons equally own all of the stock of Quigley, a foreign corporation. Quigley is a CFC.

Match the definition with the correct term. -Treasury powers over transfer pricing.

GreenCo, a U.S. corporation, earns $25 million of taxable income from U.S. sources and $10 million of taxable income from foreign sources. What amount of taxable income does GreenCo report on its U.S. tax return?

Match the definition with the correct term. -U.S. taxpayers earning income outside the United States.

A tax haven often is:

Match the definition with the correct term. -Foreign taxpayers earning income inside the United States.

Which of the following determinations requires knowing the amount of one's foreign-source gross income?

Match the definition with the correct term. -Individual who is not a U.S. citizen or resident.

Match the definition with the correct term. -Method for sourcing income and deductions.

Chang, an NRA, is employed by Fisher, Inc., a foreign corporation. In November, Chang spends 10 days in the United States performing consulting services for Fisher's U.S. branch. She earns $5,000 per month. A month includes 20 workdays.

Understanding and Working With the Federal Tax Law

Corporations Introduction and Operating Rules

Corporations Special Situations

Corporations Organization and Capital Structure

Corporations Earnings Profits and Dividend Distributions

Corporations Redemptions and Liquidations

Corporations Reorganizations

Consolidated Tax Returns

Partnerships Formation Operation and Basis

Partnerships Distributions Transfer of Interests and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters