Question 1

What is a corporate inversion and why was this provision enacted?

Accepted Answer

In a corporate inversion,a U.S.corporati

Question 2

Identify which of the following statements is false.

Accepted Answer

A)  The foreign-earned income exclusion is $91,400 in 2009. 
B)  The primary purpose for the foreign-earned income exclusion is to prevent double taxation of income. 
C)  A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period satisfies the bona fide foreign resident test. 
D)  All of the above are false. 
A)  The foreign-earned income exclusion is $91,400 in 2009. 
B)  The primary purpose for the foreign-earned income exclusion is to prevent double taxation of income. 
C)  A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period satisfies the bona fide foreign resident test. 
D)  All of the above are false.

Question 3

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

Accepted Answer

A) True 
 B)False

Question 4

Pedro,a nonresident alien,licenses a patent to a U.S.company for an $11 per unit fee for each unit produced.As a result of receiving the fee,Pedro must recognize the fee as

Accepted Answer

A)  ordinary income taxable in the United States. 
B)  capital gain taxable in the United States. 
C)  no gain or income taxed in the United States. 
D)  a portion of the gain, depending on the number of days Pedro is physically present in the United States during the current year. 
A)  ordinary income taxable in the United States. 
B)  capital gain taxable in the United States. 
C)  no gain or income taxed in the United States. 
D)  a portion of the gain, depending on the number of days Pedro is physically present in the United States during the current year.

Question 5

Explain the alternatives available to individual taxpayers for reporting foreign income taxes that have been paid or accrued.

Accepted Answer

An annual election is available to indiv

Question 6

Discuss the advantages of conducting overseas business activities through a foreign corporation.

Accepted Answer

1)The foreign corporation's liabilities

Question 7

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

Yes,the foreign corporation is

Question 8

U.S.citizen Barry is a bona fide resident of a foreign country for all of 2013.Barry uses a calendar year as his tax year and receives $158,000 in salary and allowances from his employer.Included in the $158,000 is a $25,000 housing allowance.Barry's housing costs are $30,000.The base housing amount for the current year is $15,616.What amount related to his housing can Barry exclude on his Form 2555?

Accepted Answer

A)  $14,384 
B)  $25,000 
C)  $30,000 
D)  $13,545 
A)  $14,384 
B)  $25,000 
C)  $30,000 
D)  $13,545

Question 9

U.S.Corporation,a domestic corporation,owns all of Foreign Corporation's stock.Foreign Corporation is incorporated in France.This year,Foreign Corporation reports $100,000 in aftertax profits in France,none of which is Subpart F income.U.S.Corporation

Accepted Answer

A)  must include the $100,000 profit in its current-year U.S. tax return. 
B)  never has to include Foreign Corporation's profits in its U.S. tax return. 
C)  reports Foreign Corporation's profits in its U.S. tax return in the same manner it would if Foreign Corporation were instead a foreign branch. 
D)  must include Foreign Corporation's profits in its U.S. tax return when they are paid to U.S. Corporation in the form of a dividend. 
A)  must include the $100,000 profit in its current-year U.S. tax return. 
B)  never has to include Foreign Corporation's profits in its U.S. tax return. 
C)  reports Foreign Corporation's profits in its U.S. tax return in the same manner it would if Foreign Corporation were instead a foreign branch. 
D)  must include Foreign Corporation's profits in its U.S. tax return when they are paid to U.S. Corporation in the form of a dividend.

Question 10

A U.S.citizen,who uses a calendar year as his tax year,is transferred to a foreign country by his employer.The U.S.citizen arrived in the foreign country on November 3 of last year.Residency is expected to be maintained in the foreign country until August 4 of next year.None of the years are a leap year.The first year for which an earned income exclusion can be claimed is

Accepted Answer

A)  last year. 
B)  the current year. 
C)  next year. 
D)  The earned income exclusion cannot be claimed. 
A)  last year. 
B)  the current year. 
C)  next year. 
D)  The earned income exclusion cannot be claimed.

Question 11

Identify which of the following statements is false.

Accepted Answer

A)  An accrual-basis taxpayer must make an adjustment to their foreign tax credit which reflects the change in exchange rates between the accrual date and the payment date. 
B)  Dividend income received by a U.S. individual from a foreign corporation earning nearly all of its income from outside the United States is foreign-source income. 
C)  Income from the sale of personal property (other than inventory) by a U.S. resident is considered earned in the country where the personal property is delivered. 
D)  Itemized deductions are allocated between U.S. and foreign-source income. 
A)  An accrual-basis taxpayer must make an adjustment to their foreign tax credit which reflects the change in exchange rates between the accrual date and the payment date. 
B)  Dividend income received by a U.S. individual from a foreign corporation earning nearly all of its income from outside the United States is foreign-source income. 
C)  Income from the sale of personal property (other than inventory) by a U.S. resident is considered earned in the country where the personal property is delivered. 
D)  Itemized deductions are allocated between U.S. and foreign-source income.

Question 12

Identify which of the following statements is true.

Accepted Answer

A)  When a cash-basis taxpayer elects to take a credit for accrued foreign income taxes, certain other income and expense items must likewise be accrued. 
B)  The taxpayer may revoke an election to exclude foreign-source earned income if a loss is incurred from foreign employment. 
C)  A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident alien sometime during the tax year and both spouses consent. 
D)  All of the above are true. 
A)  When a cash-basis taxpayer elects to take a credit for accrued foreign income taxes, certain other income and expense items must likewise be accrued. 
B)  The taxpayer may revoke an election to exclude foreign-source earned income if a loss is incurred from foreign employment. 
C)  A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident alien sometime during the tax year and both spouses consent. 
D)  All of the above are true.

Question 13

U.S.shareholders are not taxed on dividends paid by a foreign subsidiary as long as the earnings are not remitted to them as dividends.

Accepted Answer

A) True 
 B)False

Question 14

Darlene,a U.S.citizen,has foreign-earned income of $150,000 and employment-related expenses of $15,000.Darlene earns no other income.Darlene also has $12,000 of itemized deductions not directly related to the foreign-earned income.She can exclude $97,600 of foreign-earned income.Darlene incurs $33,750 of Country C income taxes on $150,000 of Country C taxable income.How much of Darlene's foreign income taxes are noncreditable?

Accepted Answer

[1 - ($97,600 - $9,7

Question 15

A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period and maintains a tax home there has satisfied the bona fide foreign resident test.

Accepted Answer

A) True 
 B)False

Question 16

In accounting for multinational corporations,

Accepted Answer

A)  SFAS 109 requires companies to include taxes on repatriation of foreign earnings as a deferred tax asset. 
B)  the deferral of foreign earnings is a temporary difference. 
C)  SFAS 109 allows the parent to exclude taxes on repatriated foreign earnings if they will not be repatriated in the foreseeable future. 
D)  a corporation with excess foreign tax credits will record a deferred tax liability. 
A)  SFAS 109 requires companies to include taxes on repatriation of foreign earnings as a deferred tax asset. 
B)  the deferral of foreign earnings is a temporary difference. 
C)  SFAS 109 allows the parent to exclude taxes on repatriated foreign earnings if they will not be repatriated in the foreseeable future. 
D)  a corporation with excess foreign tax credits will record a deferred tax liability.

Question 17

Phoenix Corporation is a controlled foreign corporation (CFC)incorporated in Country X.It is 100% owned by its U.S parent corporation.Phoenix has $80,000 of taxable income from the sale of widgets that were purchased from their U.S.parent corporation.All widgets have the same gross profit.Sixty percent of the widgets were sold through a Country Y wholesaler that is 100% owned by Phoenix,and are destined for use in Country Y.The remaining 40% are sold through unrelated Country X wholesalers and are destined for use in Country X.What amount of profits will be constructively distributed as foreign-based company sales income to the U.S.parent company?

Accepted Answer

A)  $0 
B)  $32,000 
C)  $48,000 
D)  $80,000 
A)  $0 
B)  $32,000 
C)  $48,000 
D)  $80,000

Question 18

What is the branch profits tax? Explain the Congressional intent behind its enactment.

Accepted Answer

The branch profits tax is imposed on the

Question 19

Discuss the Sec.482 rules concerning the sale of goods and services between a domestic parent corporation and a foreign subsidiary at a lower-than-normal price.

Accepted Answer

Section 482 is designed to prevent tax a

Question 20

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Accepted Answer

A corporation having excess foreign taxe

What is a corporate inversion and why was this provision enacted?

Identify which of the following statements is false.

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

Pedro,a nonresident alien,licenses a patent to a U.S.company for an $11 per unit fee for each unit produced.As a result of receiving the fee,Pedro must recognize the fee as

Explain the alternatives available to individual taxpayers for reporting foreign income taxes that have been paid or accrued.

Discuss the advantages of conducting overseas business activities through a foreign corporation.

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

U.S.Corporation,a domestic corporation,owns all of Foreign Corporation's stock.Foreign Corporation is incorporated in France.This year,Foreign Corporation reports $100,000 in aftertax profits in France,none of which is Subpart F income.U.S.Corporation

Identify which of the following statements is false.

Identify which of the following statements is true.

U.S.shareholders are not taxed on dividends paid by a foreign subsidiary as long as the earnings are not remitted to them as dividends.

A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period and maintains a tax home there has satisfied the bona fide foreign resident test.

In accounting for multinational corporations,

What is the branch profits tax? Explain the Congressional intent behind its enactment.

Discuss the Sec.482 rules concerning the sale of goods and services between a domestic parent corporation and a foreign subsidiary at a lower-than-normal price.

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters

Exam 16: US Taxation of Foreign-Related Transactions

What is a corporate inversion and why was this provision enacted?

Identify which of the following statements is false.

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

Pedro,a nonresident alien,licenses a patent to a U.S.company for an $11 per unit fee for each unit produced.As a result of receiving the fee,Pedro must recognize the fee as

Explain the alternatives available to individual taxpayers for reporting foreign income taxes that have been paid or accrued.

Discuss the advantages of conducting overseas business activities through a foreign corporation.

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

U.S.Corporation,a domestic corporation,owns all of Foreign Corporation's stock.Foreign Corporation is incorporated in France.This year,Foreign Corporation reports $100,000 in aftertax profits in France,none of which is Subpart F income.U.S.Corporation

Identify which of the following statements is false.

Identify which of the following statements is true.

U.S.shareholders are not taxed on dividends paid by a foreign subsidiary as long as the earnings are not remitted to them as dividends.

A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period and maintains a tax home there has satisfied the bona fide foreign resident test.

In accounting for multinational corporations,

What is the branch profits tax? Explain the Congressional intent behind its enactment.

Discuss the Sec.482 rules concerning the sale of goods and services between a domestic parent corporation and a foreign subsidiary at a lower-than-normal price.

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters