Question 1

The transfer of the assets of a U.S. corporation's foreign branch to a newly formed foreign corporation is always tax deferred under § 351.

Accepted Answer

A) True 
 B)False  False

Question 2

SilverCo, a U.S. corporation, incorporates its foreign branch in a § 351 exchange, creating GreenCo, a wholly owned foreign corporation. SilverCo transfers $200 in Yen (basis = $150) and $900 in land (basis = $925) to GreenCo. GreenCo uses these assets in carrying on a trade or business outside the United States. What gain or loss, if any, is recognized as a result of this transaction?

Accepted Answer

A)  ($25) 
B)  $0 
C)  $25 
D)  $50 
A)  ($25) 
B)  $0 
C)  $25 
D)  $50 D

Question 3

Income tax treaties may provide for either higher or lower withholding tax rates on interest income than the rate provided under U.S. statutory law.

Accepted Answer

A) True 
 B)False  False

Question 4

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 a U.S. corporation are U.S.-source based on the percentage of U.S.-source income earned by the U.S. payor. 
C)  Dividends from a U.S. corporation are U.S. source, without regard to where the U.S. corporation generated the E & P. 
D)  Dividends from a U.S. corporation are foreign-source based on the percentage of foreign-source income earned by the U.S. payor. 
A)  Dividends are sourced based on the residence of the recipient. 
B)  Dividends from a U.S. corporation are U.S.-source based on the percentage of U.S.-source income earned by the U.S. payor. 
C)  Dividends from a U.S. corporation are U.S. source, without regard to where the U.S. corporation generated the E & P. 
D)  Dividends from a U.S. corporation are foreign-source based on the percentage of foreign-source income earned by the U.S. payor.

Question 5

Wood, a U.S. corporation, owns Holz, a German corporation. Wood receives a dividend (non-Subpart F income) from Holz of 75,000€. The average exchange rate for the year is $1US: 0.6€, and the exchange rate on the date of the dividend distribution is $1US: 0.80€. Wood's exchange gain or loss is:

Accepted Answer

A)  $15,000 loss. 
B)  $15,000 gain. 
C)  $75,000 gain. 
D)  $0. There is no exchange gain or loss on a dividend distribution. 
A)  $15,000 loss. 
B)  $15,000 gain. 
C)  $75,000 gain. 
D)  $0. There is no exchange gain or loss on a dividend distribution.

Question 6

Portfolio income treated as Subpart F income.

Accepted Answer

The answer of Portfolio income treated as Subpart F income....

Question 7

Liang, an NRA, is sent to the United States by Fuller Corporation, her foreign employer. She spends 50 days in the United States and earns $20,000 for a two-month period. This amount is attributable to 40 U.S. working days and 10 non-U.S. working days. Her employer does not have a U.S. trade or business and Liang spends no other time in the U.S. for the tax year. Liang's U.S.­source taxable income is:

Accepted Answer

A)  $20,000. 
B)  $16,000. 
C)  $3,000. 
D)  $0. 
A)  $20,000. 
B)  $16,000. 
C)  $3,000. 
D)  $0.

Question 8

Which of the following statements regarding the U.S. taxation of non-U.S. persons is true?

Accepted Answer

A)  A non­U.S. person's effectively connected U.S. business income is taxed by the U.S. only if it is portfolio income. 
B)  A non­U.S. person's effectively connected U.S. business income is subject to U.S. income taxation. 
C)  A non-U.S. person may earn income from selling U.S. real property without incurring any U.S. income tax. 
D)  A non-U.S. person must spend at least 183 days in the United States before any effectively connected income is subject to U.S. taxation. 
A)  A non­U.S. person's effectively connected U.S. business income is taxed by the U.S. only if it is portfolio income. 
B)  A non­U.S. person's effectively connected U.S. business income is subject to U.S. income taxation. 
C)  A non-U.S. person may earn income from selling U.S. real property without incurring any U.S. income tax. 
D)  A non-U.S. person must spend at least 183 days in the United States before any effectively connected income is subject to U.S. taxation.

Question 9

Maximum years for a foreign tax credit carryforward.

Accepted Answer

The answer of Maximum years for a foreign tax credit...

Question 10

ForCo, a foreign corporation, receives interest income of $100,000 from USCo, an unrelated domestic corporation. USCo has historically earned 85% of its income from foreign sources. What amount of ForCo's interest income is U.S. source?

Accepted Answer

A)  $0 
B)  $50,000 
C)  $85,000 
D)  $100,000 
A)  $0 
B)  $50,000 
C)  $85,000 
D)  $100,000

Question 11

Describe and diagram the timeline that most businesses use to enter the international markets.

Accepted Answer

Most businesses ente

Question 12

Which of the following statements regarding the sourcing of gross income is true?

Accepted Answer

A)  Non-U.S. persons not engaged in a U.S. trade or business are indifferent as to whether any of their income is U.S. source. 
B)  All income earned by non-U.S. persons not engaged in a U.S. trade or business is treated as foreign source. 
C)  U.S.-source income is not subject to withholding so long as such income is not treated as effectively connected with a U.S. trade or business. 
D)  Certain U.S.-source investment income earned by non-U.S. persons not engaged in a U.S. trade or business may be subject to a U.S. withholding tax. 
A)  Non-U.S. persons not engaged in a U.S. trade or business are indifferent as to whether any of their income is U.S. source. 
B)  All income earned by non-U.S. persons not engaged in a U.S. trade or business is treated as foreign source. 
C)  U.S.-source income is not subject to withholding so long as such income is not treated as effectively connected with a U.S. trade or business. 
D)  Certain U.S.-source investment income earned by non-U.S. persons not engaged in a U.S. trade or business may be subject to a U.S. withholding tax.

Question 13

Hendricks Corporation, a domestic corporation, owns 40 percent of Shane Corporation and 55 percent of Ferrell Corporation, both foreign corporations. Ferrell owns the other 60 percent of Shane Corporation. Both Shane and Ferrell are CFCs.

Accepted Answer

A) True 
 B)False

Question 14

Method for sourcing income and deductions.

Accepted Answer

The answer of Method for sourcing income and deductions....

Question 15

Wellington, Inc., a U.S. corporation, owns 30% of a CFC that has $50 million of earnings and profits for the current year. Included in that amount is $20 million of Subpart F income. Wellington has been a CFC for the entire year and makes no distributions in the current year. Wellington must include in gross income (before any § 78 gross­up):

Accepted Answer

A)  $0. 
B)  $6 million. 
C)  $20 million. 
D)  $50 million. 
A)  $0. 
B)  $6 million. 
C)  $20 million. 
D)  $50 million.

Question 16

Discuss the primary purposes of income tax treaties.

Accepted Answer

The primary purpose of an income tax tre

Question 17

Which of the following transactions by a U.S. corporation may result in taxation under § 367?

Accepted Answer

A)  Incorporation of U.S branch as a U.S. corporation when the branch earns only foreign-source income. 
B)  Incorporation of a U.S. branch by a U.S. corporation when the branch earns only U.S.-source income. 
C)  Incorporation of a U.S. branch as a U.S. corporation if the new U.S. corporation also has foreign shareholders. 
D)  Incorporation of a U.S. branch as a U.S. corporation if the new U.S. corporation has no foreign shareholders. 
A)  Incorporation of U.S branch as a U.S. corporation when the branch earns only foreign-source income. 
B)  Incorporation of a U.S. branch by a U.S. corporation when the branch earns only U.S.-source income. 
C)  Incorporation of a U.S. branch as a U.S. corporation if the new U.S. corporation also has foreign shareholders. 
D)  Incorporation of a U.S. branch as a U.S. corporation if the new U.S. corporation has no foreign shareholders.

Question 18

OutCo, a controlled foreign corporation in Meena, earns $600,000 in net interest and dividend income from investments in the bonds and stock of unrelated companies. All of the dividend payors are located in Meena. OutCo's Subpart F income for the year is:

Accepted Answer

A)  $0. 
B)  $0 only if OutCo is engaged in a trade or business in Meena. 
C)  $600,000. 
D)  $600,000 only if OutCo is engaged in a trade or business in Meena. 
A)  $0. 
B)  $0 only if OutCo is engaged in a trade or business in Meena. 
C)  $600,000. 
D)  $600,000 only if OutCo is engaged in a trade or business in Meena.

Question 19

GlobalCo, a foreign corporation not engaged in a U.S. trade or business, receives $80,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 24% of its income from foreign sources. How much of GlobalCo's interest income is U.S. source?

Accepted Answer

A)  $0 
B)  $19,200 
C)  $60,800 
D)  $80,000 
A)  $0 
B)  $19,200 
C)  $60,800 
D)  $80,000

Question 20

The sourcing rules of Federal income taxation apply to deductions as well as to income items.

Accepted Answer

A) True 
 B)False

The transfer of the assets of a U.S. corporation's foreign branch to a newly formed foreign corporation is always tax deferred under § 351.

Income tax treaties may provide for either higher or lower withholding tax rates on interest income than the rate provided under U.S. statutory law.

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

Wood, a U.S. corporation, owns Holz, a German corporation. Wood receives a dividend (non-Subpart F income) from Holz of 75,000€. The average exchange rate for the year is $1US: 0.6€, and the exchange rate on the date of the dividend distribution is $1US: 0.80€. Wood's exchange gain or loss is:

Portfolio income treated as Subpart F income.

Which of the following statements regarding the U.S. taxation of non-U.S. persons is true?

Maximum years for a foreign tax credit carryforward.

ForCo, a foreign corporation, receives interest income of $100,000 from USCo, an unrelated domestic corporation. USCo has historically earned 85% of its income from foreign sources. What amount of ForCo's interest income is U.S. source?

Describe and diagram the timeline that most businesses use to enter the international markets.

Which of the following statements regarding the sourcing of gross income is true?

Hendricks Corporation, a domestic corporation, owns 40 percent of Shane Corporation and 55 percent of Ferrell Corporation, both foreign corporations. Ferrell owns the other 60 percent of Shane Corporation. Both Shane and Ferrell are CFCs.

Method for sourcing income and deductions.

Discuss the primary purposes of income tax treaties.

Which of the following transactions by a U.S. corporation may result in taxation under § 367?

OutCo, a controlled foreign corporation in Meena, earns $600,000 in net interest and dividend income from investments in the bonds and stock of unrelated companies. All of the dividend payors are located in Meena. OutCo's Subpart F income for the year is:

GlobalCo, a foreign corporation not engaged in a U.S. trade or business, receives $80,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 24% of its income from foreign sources. How much of GlobalCo's interest income is U.S. source?

The sourcing rules of Federal income taxation apply to deductions as well as to income items.

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

Multistate Corporate Taxation

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

The transfer of the assets of a U.S. corporation's foreign branch to a newly formed foreign corporation is always tax deferred under § 351.

Income tax treaties may provide for either higher or lower withholding tax rates on interest income than the rate provided under U.S. statutory law.

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

Portfolio income treated as Subpart F income.

Which of the following statements regarding the U.S. taxation of non-U.S. persons is true?

Maximum years for a foreign tax credit carryforward.

ForCo, a foreign corporation, receives interest income of $100,000 from USCo, an unrelated domestic corporation. USCo has historically earned 85% of its income from foreign sources. What amount of ForCo's interest income is U.S. source?

Describe and diagram the timeline that most businesses use to enter the international markets.

Which of the following statements regarding the sourcing of gross income is true?

Hendricks Corporation, a domestic corporation, owns 40 percent of Shane Corporation and 55 percent of Ferrell Corporation, both foreign corporations. Ferrell owns the other 60 percent of Shane Corporation. Both Shane and Ferrell are CFCs.

Method for sourcing income and deductions.

Discuss the primary purposes of income tax treaties.

Which of the following transactions by a U.S. corporation may result in taxation under § 367?

OutCo, a controlled foreign corporation in Meena, earns $600,000 in net interest and dividend income from investments in the bonds and stock of unrelated companies. All of the dividend payors are located in Meena. OutCo's Subpart F income for the year is:

GlobalCo, a foreign corporation not engaged in a U.S. trade or business, receives $80,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 24% of its income from foreign sources. How much of GlobalCo's interest income is U.S. source?

The sourcing rules of Federal income taxation apply to deductions as well as to income items.

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

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters