Question 1

Treasury powers over transfer pricing.

Accepted Answer

The answer of Treasury powers over transfer pricing....

Question 2

Nico lives in California. She was born in Peru but holds a green card. Nico is a nonresident alien (NRA).

Accepted Answer

A) True 
 B)False

Question 3

Carol, a citizen and resident of Adagio, reports gross income that is effectively connected with a U.S. business. No deductions are allowed against this income, and Carol's U.S. tax rate is a flat 30 percent.

Accepted Answer

A) True 
 B)False

Question 4

Mitch, an NRA, sells a building in Omaha for $1 million. His basis in the building is zero for both regular tax and AMT purposes. Mitch has no other contact with the U.S. other than the ownership of the building. How much Federal income tax is due from Mitch on the sale?

Accepted Answer

A)  $0, he is an NRA. 
B)  The amount realized times the top individual tax rate. 
C)  The net gain times the top capital gains tax rate. 
D)  The net gain taxed at the lesser of the applicable regular or AMT rates. 
A)  $0, he is an NRA. 
B)  The amount realized times the top individual tax rate. 
C)  The net gain times the top capital gains tax rate. 
D)  The net gain taxed at the lesser of the applicable regular or AMT rates.

Question 5

The following persons own Schlecht Corporation, a foreign corporation.   None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

Accepted Answer

A)  Schlecht is not a CFC. 
B)  Chee includes $90,000 in gross income. 
C)  Marina is not a U.S. shareholder. 
D)  Marina includes $24,000 in gross income. 
A)  Schlecht is not a CFC. 
B)  Chee includes $90,000 in gross income. 
C)  Marina is not a U.S. shareholder. 
D)  Marina includes $24,000 in gross income.

Question 6

WorldCo, a foreign corporation not engaged in a U.S. trade or business, receives $50,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 78% of its income from foreign sources. How much of WorldCo's interest income is U.S. source?

Accepted Answer

A)  $0 
B)  $11,000 
C)  $39,000 
D)  $50,000 
A)  $0 
B)  $11,000 
C)  $39,000 
D)  $50,000

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  They allow for a deferral of non-U.S.-source income from U.S. taxation. 
B)  They provide certainty as to the U.S. income tax treatment of cross-border transactions. 
C)  They prevent shifting of income from the U.S. to high-tax non-U.S. jurisdictions. 
D)  They prevent shifting of income from the U.S. to low-tax non-U.S. jurisdictions. 
A)  They allow for a deferral of non-U.S.-source income from U.S. taxation. 
B)  They provide certainty as to the U.S. income tax treatment of cross-border transactions. 
C)  They prevent shifting of income from the U.S. to high-tax non-U.S. jurisdictions. 
D)  They prevent shifting of income from the U.S. to low-tax non-U.S. jurisdictions.

Question 9

Waldo, Inc., a U.S. corporation, owns 100% of Orion, Ltd., a foreign corporation. Orion earns only general basket income. During the current year, Orion paid Waldo a $5,000 dividend. The foreign tax credit associated with this dividend is $3,000. The foreign jurisdiction requires a withholding tax of 10%, so Waldo received only $4,500 in cash as a result of the dividend. What is Waldo's total U.S. gross income reported as a result of the $4,500 cash received?

Accepted Answer

A)  $8,000 
B)  $5,000 
C)  $4,500 
D)  $3,000 
A)  $8,000 
B)  $5,000 
C)  $4,500 
D)  $3,000

Question 10

KeenCo, a U.S. corporation, is the sole shareholder of LovettCo, a controlled foreign corporation. LovettCo has $250,000 in E & P attributable to income not previously taxed to KeenCo. LovettCo also holds $200,000 E & P attributable to income taxed to the U.S. shareholder as Subpart F income. LovettCo makes a $150,000 dividend distribution to KeenCo. Ignoring any deemed paid credit implications, what is the U.S. gross income to KeenCo resulting from this dividend?

Accepted Answer

$0. A controlled foreign corporation mai

Question 11

U.S. individuals who receive dividends from foreign corporations may claim the deemed-paid foreign tax credit related to such dividends.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following persons typically is concerned with the U.S.-sourcing rules for gross income?

Accepted Answer

A)  U.S. persons with only U.S. activities. 
B)  U.S. persons that earn only tax-exempt income. 
C)  U.S. persons with U.S. and non-U.S. activities. 
D)  Non-U.S. persons with only non-U.S. activities. 
A)  U.S. persons with only U.S. activities. 
B)  U.S. persons that earn only tax-exempt income. 
C)  U.S. persons with U.S. and non-U.S. activities. 
D)  Non-U.S. persons with only non-U.S. activities.

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

Maximum years for a foreign tax credit carryback.

Accepted Answer

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

Question 15

A controlled foreign corporation (CFC) realizes Subpart F income from:

Accepted Answer

A)  Purchase of inventory from unrelated U.S. person and sale outside the CFC country. 
B)  Purchase of inventory from a related U.S. person and sale outside the CFC country. 
C)  Services performed for the U.S. parent in a country in which the CFC was organized. 
D)  Services performed on behalf of an unrelated party in a country outside the country in which the CFC was organized. 
A)  Purchase of inventory from unrelated U.S. person and sale outside the CFC country. 
B)  Purchase of inventory from a related U.S. person and sale outside the CFC country. 
C)  Services performed for the U.S. parent in a country in which the CFC was organized. 
D)  Services performed on behalf of an unrelated party in a country outside the country in which the CFC was organized.

Question 16

A business operation that accounts for profits and losses using its functional currency.

Accepted Answer

d
Match the definition with the correct

Question 17

Which of the following statements regarding income sourcing is correct?

Accepted Answer

A)  Everything else being equal, a larger foreign-source income decreases the foreign tax credit limitation for U.S. persons. 
B)  Everything else being equal, a larger foreign-source income increases the foreign tax credit limitation for U.S. persons. 
C)  Everything else being equal, a larger U.S.-source income increases the foreign tax credit limitation for U.S. persons. 
D)  Everything else being equal, changing foreign-source income does not change the foreign tax credit limitation for U.S. persons. 
A)  Everything else being equal, a larger foreign-source income decreases the foreign tax credit limitation for U.S. persons. 
B)  Everything else being equal, a larger foreign-source income increases the foreign tax credit limitation for U.S. persons. 
C)  Everything else being equal, a larger U.S.-source income increases the foreign tax credit limitation for U.S. persons. 
D)  Everything else being equal, changing foreign-source income does not change the foreign tax credit limitation for U.S. persons.

Question 18

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:

Accepted Answer

A)  35%. 
B)  30%. 
C)  15%. 
D)  0%. 
A)  35%. 
B)  30%. 
C)  15%. 
D)  0%.

Question 19

Bilateral agreement between two countries related to tax issues.

Accepted Answer

The answer of Bilateral agreement between two countries related to...

Question 20

A CFC's profits from sales of goods and services.

Accepted Answer

The answer of A CFC's profits from sales of goods...

Treasury powers over transfer pricing.

Nico lives in California. She was born in Peru but holds a green card. Nico is a nonresident alien (NRA).

Carol, a citizen and resident of Adagio, reports gross income that is effectively connected with a U.S. business. No deductions are allowed against this income, and Carol's U.S. tax rate is a flat 30 percent.

Mitch, an NRA, sells a building in Omaha for $1 million. His basis in the building is zero for both regular tax and AMT purposes. Mitch has no other contact with the U.S. other than the ownership of the building. How much Federal income tax is due from Mitch on the sale?

The following persons own Schlecht Corporation, a foreign corporation. None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

WorldCo, a foreign corporation not engaged in a U.S. trade or business, receives $50,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 78% of its income from foreign sources. How much of WorldCo's interest income is U.S. source?

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 best describes the primary purpose of the Subpart F income provisions?

U.S. individuals who receive dividends from foreign corporations may claim the deemed-paid foreign tax credit related to such dividends.

Which of the following persons typically is concerned with the U.S.-sourcing rules for gross 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.

Maximum years for a foreign tax credit carryback.

A controlled foreign corporation (CFC) realizes Subpart F income from:

A business operation that accounts for profits and losses using its functional currency.

Which of the following statements regarding income sourcing is correct?

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:

Bilateral agreement between two countries related to tax issues.

A CFC's profits from sales of goods and services.

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

Treasury powers over transfer pricing.

Nico lives in California. She was born in Peru but holds a green card. Nico is a nonresident alien (NRA).

Carol, a citizen and resident of Adagio, reports gross income that is effectively connected with a U.S. business. No deductions are allowed against this income, and Carol's U.S. tax rate is a flat 30 percent.

Mitch, an NRA, sells a building in Omaha for $1 million. His basis in the building is zero for both regular tax and AMT purposes. Mitch has no other contact with the U.S. other than the ownership of the building. How much Federal income tax is due from Mitch on the sale?

The following persons own Schlecht Corporation, a foreign corporation. None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

WorldCo, a foreign corporation not engaged in a U.S. trade or business, receives $50,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 78% of its income from foreign sources. How much of WorldCo's interest income is U.S. source?

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 best describes the primary purpose of the Subpart F income provisions?

U.S. individuals who receive dividends from foreign corporations may claim the deemed-paid foreign tax credit related to such dividends.

Which of the following persons typically is concerned with the U.S.-sourcing rules for gross 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.

Maximum years for a foreign tax credit carryback.

A controlled foreign corporation (CFC) realizes Subpart F income from:

A business operation that accounts for profits and losses using its functional currency.

Which of the following statements regarding income sourcing is correct?

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:

Bilateral agreement between two countries related to tax issues.

A CFC's profits from sales of goods and services.

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