Exam 25: Taxation of International Transactions

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.

Zhang,an NRA who is not a resident of a treaty country,receives taxable dividends of $50,000 from U.S.corporations.Zhang does not conduct a U.S.trade or business.Zhang's dividends are subject to withholding by the payor of:

USCo,a U.S.corporation,receives $700,000 of foreign-source passive income on which foreign taxes of $70,000 are withheld.Its worldwide taxable income is $1,500,000 and its U.S.tax liability before the foreign tax credit is $525,000.What is USCo's allowed foreign tax credit?

The "residence of seller" rule is used in determining the sourcing of all gross income and deductions of a U.S.multinational business.

Match the definition with the correct term. a.Inbound b.Outbound c.Allocation and apportionment d.Qualified business unit e.Tax haven f.Income tax treaty g.Section 482 -A business operation that accounts for profits and losses using its functional currency.

Bryden,a controlled foreign corporation owned 100% by USCo,earned $900,000 in Subpart F income for the current year.Bryden's current year E & P is $350,000,and its accumulated E & P is $15 million.What is the current year Subpart F deemed dividend to USCo?

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.

Yvonne is a citizen of France and does not have permanent resident status in the United States.During the last three years she has spent a number of days in the United States. Current year - 150 days First prior year - 150 days Second prior year - 90 days Is Yvonne treated as a U.S.resident for the current year?

Julio,a nonresident alien,realizes a gain on the sale of commercial real estate located in Omaha.The real estate was sold to Mariana,Julio's cousin who is also a nonresident alien.Julio recognizes foreign-source income from the sale because his home country is not the U.S.

"Inbound" and "offshore" asset transfers by a U.S.business can be subject to immediate Federal income taxation under § 367.

Which of the following statements best describes the primary purpose of the Subpart F income provisions?

Which of the following statements regarding the taxation of U.S.real property gains recognized by non-U.S.persons not engaged in a U.S.trade or business is false? Gains from the disposition of U.S.real property are:

Subpart F income includes portfolio income like dividends and interest.