Exam 25: Taxation of International Transactions

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

LocalCo merges into HeirCo, a non-U.S. entity, in a transaction that would qualify as a "Type A" reorganization. The resulting realized gain is tax-deferred under U.S. income tax law using §§ 351 and 368.

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

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 regarding a non-U.S. person's U.S. tax consequences is true?

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.

Interest paid to an unrelated party by a domestic corporation that historically earns more than 50% of its gross income each year from the conduct of an active trade or business outside the United States is foreign-source income.

Kipp, a U.S. shareholder under the CFC provisions, owns 40% of a CFC. If the CFC's Subpart F income for the taxable year is $200,000, Kipp is taxed on receipt of a constructive dividend of $80,000.