Exam 9: Taxation of International Transactions

LocalCo merges into HeirCo,a non-U.S.entity,in a transaction that would qualify as a "Type A" reorganization.The resulting realized gain is tax-deferred under U.S.income tax law,using §§ 351 and 368.

Which of the following determinations does not require knowing the amounts of one's U.S.- versus foreign-source income?

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 regarding the U.S.taxation of foreign persons is true?

Performance,Inc. ,a U.S.corporation,owns 100% of Krumb,Ltd. ,a foreign corporation.Krumb earns only general basket income.During the current year,Krumb paid Performance a $200,000 dividend.The foreign tax credit associated with this dividend is $30,000.The foreign jurisdiction requires a withholding tax of 30%,so Performance received only $140,000 in cash as a result of the dividend.What is Performance's total U.S.gross income reported as a result of the $140,000 cash received?

Which of the following statements regarding a foreign person's U.S.tax consequences is true?

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 $15,000 for a two-month period.This amount is attributable to 40 U.S.working days and 10 foreign 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:

Which of the following persons typically is not concerned with the U.S.-sourcing rules for gross income?

WaterCo,a domestic corporation,purchases inventory for resale from unrelated distributors outside the United States and resells this inventory to customers inside the United States with title passing inside the United States.What is the source of WaterCo's inventory sales income?

Discuss the primary purposes of income tax treaties.

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.

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?

Freiburg,Ltd. ,a foreign corporation,operates a U.S.branch that reports effectively connected U.S.earnings and profits (after income taxes)of $800,000 for the tax year.The branch's U.S.net equity at the beginning of the tax year is $3 million and at the end of the tax year is $2.4 million.Freiburg is organized in a nontreaty country.Compute Freiburg's branch profits tax for the year.

Which of the following statements regarding the translation of foreign income taxes is true?

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

Which of the following foreign taxes paid by a U.S.corporation may be eligible for the foreign tax credit?

Which of the following is not a U.S.person?

Given the following information,determine whether Greta,an alien,is a U.S.resident for 2012.Assume that Greta cannot establish a tax home in or a closer connection to a foreign country.

Generally,accrued foreign income taxes are translated at the:

Which of the following transactions,if entered into by an NRA,is not subject to U.S.taxation?