Question 1

Which of the following is required in order for a transaction to be considered a corporate inversion?

Accepted Answer

A)  A foreign corporation acquires substantially all of the assets of a U.S. corporation. 
B)  Former shareholders of the U.S. corporation own 80% or more of the stock in the foreign corporation by reason of their U.S. stock ownership. 
C)  The former U.S. company and its affiliates do not conduct substantial business in the foreign country of incorporation. 
D)  All of the above are required. 
A)  A foreign corporation acquires substantially all of the assets of a U.S. corporation. 
B)  Former shareholders of the U.S. corporation own 80% or more of the stock in the foreign corporation by reason of their U.S. stock ownership. 
C)  The former U.S. company and its affiliates do not conduct substantial business in the foreign country of incorporation. 
D)  All of the above are required.

Question 2

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 on the last day of the tax year and both spouses consent.

Accepted Answer

A) True 
 B)False

Question 3

Compare the U.S.tax treatment of a nonresident alien and a resident alien,both of whom earn U.S.trade or business and U.S.investment income.

Accepted Answer

A nonresident alien who earns investment

Question 4

A foreign corporation is owned by five unrelated individuals.John,Sam,and David are U.S.citizens who own 30%,18% and 9%,respectively,of the foreign corporation's single class of stock.Alberto and Manuel are nonresident aliens who own 37% and 6%,respectively,of the foreign corporation's stock.Which of the following statements is true?

Accepted Answer

A)  There are three "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
B)  There are three "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
C)  There are two "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
D)  There are two "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
A)  There are three "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
B)  There are three "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
C)  There are two "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
D)  There are two "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) .

Question 5

Jacque,a single nonresident alien,is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has $75,000 of sales income earned while in the United States and $30,000 of non-U.S.sales income earned while he was outside the United States.How will the income be taxed and how will the tax be collected?

Accepted Answer

The $30,000 of non-U.S.sales commissions

Question 6

U.S.citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign-earned income exclusion for 60 days in 2010; 365 days in 2011; and 60 days this year,2012.The maximum earned income exclusion for this year is?

Accepted Answer

A)  $13,733 
B)  $16,044 
C)  $13,151 
D)  none of the above 
A)  $13,733 
B)  $16,044 
C)  $13,151 
D)  none of the above

Question 7

Overseas business activities conducted by U.S.corporations receive which one of the following favorable tax breaks?

Accepted Answer

A)  Foreign subsidiaries of U.S. corporations are exempt from the U.S. corporate income tax unless they earn U.S.-source investment or trade or business income. 
B)  Foreign subsidiaries of U.S. corporations are always exempt from the U.S. corporate income tax even if they earn U.S.-source investment or trade or business income. 
C)  Domestic corporations conducting business in a foreign country through a branch office or facility can exempt non-U.S. income from the U.S. corporate income tax. 
D)  All of the above are correct. 
A)  Foreign subsidiaries of U.S. corporations are exempt from the U.S. corporate income tax unless they earn U.S.-source investment or trade or business income. 
B)  Foreign subsidiaries of U.S. corporations are always exempt from the U.S. corporate income tax even if they earn U.S.-source investment or trade or business income. 
C)  Domestic corporations conducting business in a foreign country through a branch office or facility can exempt non-U.S. income from the U.S. corporate income tax. 
D)  All of the above are correct.

Question 8

Karen,a U.S.citizen,earns $40,000 of taxable income from U.S.sources,$20,000 in taxable wages from Country A and $20,000 in taxable interest from Country B.The U.S.tax rate is 25%.The tax on Country A income is $8,000,and Country B charges no tax on the interest income.Assuming two baskets are needed for the two types of income because the interest is passive income,Karen's foreign tax credit that can be claimed is

Accepted Answer

A)  $5,000. 
B)  $10,000. 
C)  $20,000. 
D)  none of the above 
A)  $5,000. 
B)  $10,000. 
C)  $20,000. 
D)  none of the above

Question 9

Jacque,a single nonresident alien,is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has $3,000 of interest income earned on a bank account in his home country and $1,800 of interest income earned on a bank account located in Addison,Illinois.How will the interest be taxed and how will the tax be collected?

Accepted Answer

The United States do

Question 10

A nonresident alien earns $10,000 of dividends from a domestic corporation,which is the alien's only U.S.source income.Which one of the following statements is incorrect?

Accepted Answer

A)  The nonresident alien's U.S. tax rate is 30% unless reduced by a tax treaty. 
B)  The domestic corporation must withhold the U.S. taxes from the alien's dividend payment. 
C)  The 30% tax rate is applied against gross income. 
D)  The nonresident alien must pay estimated taxes on the dividend income at a 30% rate. 
A)  The nonresident alien's U.S. tax rate is 30% unless reduced by a tax treaty. 
B)  The domestic corporation must withhold the U.S. taxes from the alien's dividend payment. 
C)  The 30% tax rate is applied against gross income. 
D)  The nonresident alien must pay estimated taxes on the dividend income at a 30% rate.

Question 11

Identify which of the following statements is false.

Accepted Answer

A)  Earned income is excludable from gross income only if it is foreign-source income. 
B)  Taxable pensions and annuities are excluded from the definition of earned income when computing the foreign-earned income exclusion. 
C)  An individual meets the bona fide resident test by establishing a home in a foreign country for 330 days. 
D)  All of the above are false. 
A)  Earned income is excludable from gross income only if it is foreign-source income. 
B)  Taxable pensions and annuities are excluded from the definition of earned income when computing the foreign-earned income exclusion. 
C)  An individual meets the bona fide resident test by establishing a home in a foreign country for 330 days. 
D)  All of the above are false.

Question 12

Quality Corporation created a foreign subsidiary in Country C this year.The subsidiary receives components from Quality,assembles the components into a finished product using local labor,and sells them to unrelated wholesalers in Countries A,B,and C using its own sales force.The foreign subsidiary has paid no dividends to the parent this year.What tax issues should Quality's Director of Taxes consider with respect to these activities?

Accepted Answer

• Is the Country C corporation a control

Question 13

Music Corporation is a CFC incorporated in Country M.Music receives interest and dividends from its two foreign subsidiary corporations,Sharp Corporation and Flat Corporation.Sharp is incorporated in Country S and conducts all of its activities in that country.Flat is incorporated in Country M and conducts all of its activities in that country.Are the interest and dividends received by Music Corporation FPHCI?

Accepted Answer

Only the dividends and interes

Question 14

A foreign corporation with a single class of stock is owned 8% by Bert,49% by Xi Yong,30% by Ernie,and 13% by Mark.Bert,Ernie,and Mark are U.S.citizens,and Xi Yong is a nonresident alien.The shareholders are not related.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

It is not a CFC (only 43% owne

Question 15

Identify which of the following statements is true.

Accepted Answer

A)  For a foreign corporation to be a controlled foreign corporation (CF
C) , more than 40% of its voting stock, or more than 40% of the value of its outstanding stock, must be owned by U.S. shareholders on any day of the corporation's tax year. 
B)  Under the Subpart F rules, controlled foreign corporations (CFCs) are required to distribute a certain portion of their income as dividends to their U.S. shareholders. 
C)  When a controlled foreign corporation (CF
C)  earns Subpart F income, such income is considered to be a constructive distribution to the CFC's U.S. shareholders on the last day of the CFC's tax year, or the last day on which CFC status is retained. 
D)  All of the above are true. 
A)  For a foreign corporation to be a controlled foreign corporation (CF
C) , more than 40% of its voting stock, or more than 40% of the value of its outstanding stock, must be owned by U.S. shareholders on any day of the corporation's tax year. 
B)  Under the Subpart F rules, controlled foreign corporations (CFCs) are required to distribute a certain portion of their income as dividends to their U.S. shareholders. 
C)  When a controlled foreign corporation (CF
C)  earns Subpart F income, such income is considered to be a constructive distribution to the CFC's U.S. shareholders on the last day of the CFC's tax year, or the last day on which CFC status is retained. 
D)  All of the above are true.

Question 16

U.S.citizen Patrick is a bona fide resident of a foreign country for all of the current year.Patrick uses a calendar year as his tax year.He has $100,000 of self-employment income and incurs $20,000 in housing expenses.The base housing cost amount is $15,616.The deduction for housing expenses is

Accepted Answer

A)  $13,184 for AGI. 
B)  $13,184 from AGI. 
C)  $4,384 for AGI. 
D)  $6,816 from AGI. 
A)  $13,184 for AGI. 
B)  $13,184 from AGI. 
C)  $4,384 for AGI. 
D)  $6,816 from AGI.

Question 17

Alan,a U.S.citizen,works in Germany and earns $70,000,paying $20,000 in German taxes.His U.S.income is $40,000 and he pays $8,000 in U.S.taxes.His U.S.taxes on his worldwide income are $22,500.What is Alan's foreign tax credit? Assume he does not qualify for the foreign-earned income exclusion.

Accepted Answer

A)  $12,000 
B)  $14,318 
C)  $20,000 
D)  none of the above 
A)  $12,000 
B)  $14,318 
C)  $20,000 
D)  none of the above

Question 18

Discuss the use of a "tax haven" nation to reduce taxes and the effect of Subpart F rules on such planning.

Accepted Answer

A domestic manufacturing corporation for

Question 19

Identify which of the following statements is true.

Accepted Answer

A)  The losses of a foreign corporation that is 100% owned by a domestic corporation can be deducted by the domestic corporation to offset its gross income in the year incurred. 
B)  The deemed paid foreign tax credit was enacted so as not to discourage foreign direct investment through foreign branches. 
C)  A dividend remittance made by a noncontrolled foreign corporation is translated into U.S. dollars at the current exchange rate for the date the dividend is paid. 
D)  All of the above are false. 
A)  The losses of a foreign corporation that is 100% owned by a domestic corporation can be deducted by the domestic corporation to offset its gross income in the year incurred. 
B)  The deemed paid foreign tax credit was enacted so as not to discourage foreign direct investment through foreign branches. 
C)  A dividend remittance made by a noncontrolled foreign corporation is translated into U.S. dollars at the current exchange rate for the date the dividend is paid. 
D)  All of the above are false.

Question 20

Identify which of the following statements is true.

Accepted Answer

A)  Capital gains earned in the United States, other than in the conduct of a U.S. trade or business, are taxed to a nonresident alien only if the alien is physically present in the United States for at least 183 days during the tax year. 
B)  Aliens, who are U.S. residents, are taxed only on their U.S. income. 
C)  A nonresident alien from a nontreaty country is taxed at a 35% rate on U.S. source investment income without the benefit of any deductions. 
D)  All of the above are true. 
A)  Capital gains earned in the United States, other than in the conduct of a U.S. trade or business, are taxed to a nonresident alien only if the alien is physically present in the United States for at least 183 days during the tax year. 
B)  Aliens, who are U.S. residents, are taxed only on their U.S. income. 
C)  A nonresident alien from a nontreaty country is taxed at a 35% rate on U.S. source investment income without the benefit of any deductions. 
D)  All of the above are true.

Which of the following is required in order for a transaction to be considered a corporate inversion?

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 on the last day of the tax year and both spouses consent.

Compare the U.S.tax treatment of a nonresident alien and a resident alien,both of whom earn U.S.trade or business and U.S.investment income.

U.S.citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign-earned income exclusion for 60 days in 2010; 365 days in 2011; and 60 days this year,2012.The maximum earned income exclusion for this year is?

Overseas business activities conducted by U.S.corporations receive which one of the following favorable tax breaks?

A nonresident alien earns $10,000 of dividends from a domestic corporation,which is the alien's only U.S.source income.Which one of the following statements is incorrect?

Identify which of the following statements is false.

A foreign corporation with a single class of stock is owned 8% by Bert,49% by Xi Yong,30% by Ernie,and 13% by Mark.Bert,Ernie,and Mark are U.S.citizens,and Xi Yong is a nonresident alien.The shareholders are not related.Is the foreign corporation a controlled foreign corporation (CFC)?

Identify which of the following statements is true.

U.S.citizen Patrick is a bona fide resident of a foreign country for all of the current year.Patrick uses a calendar year as his tax year.He has $100,000 of self-employment income and incurs $20,000 in housing expenses.The base housing cost amount is $15,616.The deduction for housing expenses is

Alan,a U.S.citizen,works in Germany and earns $70,000,paying $20,000 in German taxes.His U.S.income is $40,000 and he pays $8,000 in U.S.taxes.His U.S.taxes on his worldwide income are $22,500.What is Alan's foreign tax credit? Assume he does not qualify for the foreign-earned income exclusion.

Discuss the use of a "tax haven" nation to reduce taxes and the effect of Subpart F rules on such planning.

Identify which of the following statements is true.

Identify which of the following statements is true.

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

Which of the following is required in order for a transaction to be considered a corporate inversion?

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 on the last day of the tax year and both spouses consent.

Compare the U.S.tax treatment of a nonresident alien and a resident alien,both of whom earn U.S.trade or business and U.S.investment income.

U.S.citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign-earned income exclusion for 60 days in 2010; 365 days in 2011; and 60 days this year,2012.The maximum earned income exclusion for this year is?

Overseas business activities conducted by U.S.corporations receive which one of the following favorable tax breaks?

A nonresident alien earns $10,000 of dividends from a domestic corporation,which is the alien's only U.S.source income.Which one of the following statements is incorrect?

Identify which of the following statements is false.

A foreign corporation with a single class of stock is owned 8% by Bert,49% by Xi Yong,30% by Ernie,and 13% by Mark.Bert,Ernie,and Mark are U.S.citizens,and Xi Yong is a nonresident alien.The shareholders are not related.Is the foreign corporation a controlled foreign corporation (CFC)?

Identify which of the following statements is true.

U.S.citizen Patrick is a bona fide resident of a foreign country for all of the current year.Patrick uses a calendar year as his tax year.He has $100,000 of self-employment income and incurs $20,000 in housing expenses.The base housing cost amount is $15,616.The deduction for housing expenses is

Alan,a U.S.citizen,works in Germany and earns $70,000,paying $20,000 in German taxes.His U.S.income is $40,000 and he pays $8,000 in U.S.taxes.His U.S.taxes on his worldwide income are $22,500.What is Alan's foreign tax credit? Assume he does not qualify for the foreign-earned income exclusion.

Discuss the use of a "tax haven" nation to reduce taxes and the effect of Subpart F rules on such planning.

Identify which of the following statements is true.

Identify which of the following statements is true.

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