FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Taxation of International Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Multiple Choice

Review LaterAdd Note

Review Later

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

A) Dividends from foreign corporations are always foreign source.
B) Dividends are sourced based on the residence of the recipient.
C) Dividends from foreign corporations are foreign-source only to the extent that 80% or more of the foreign corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a foreign trade or business.
D) A percentage of dividends from foreign corporations are U.S. source to the extent that 25% or more of the foreign corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a U.S. trade or business.

E) All of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 82

True/False

Review LaterAdd Note

Review Later

A nonresident alien with U.S.-source income effectively connected with a U.S. trade or business can take effectively connected deductions against that income.

A) True
B) False

Correct Answer

verified

Show Answer

Question 83

True/False

Review LaterAdd Note

A U.S. business conducts international communications activities between the U.S. and Spain. The resulting income is sourced 100% in the United States.

Jilt, a non-U.S. corporation, not resident in a treaty country, operates a U.S. branch that earns effectively connected E & P of $4 million for the tax year. The branch increases its investments in U.S. property (its U.S. net equity) by $1,600,000. The branch pays a U.S. corporate income tax of $2,153,846. Jilt's branch profits tax is:

Dark, Inc., a U.S. corporation, operates Dunkel, an unincorporated branch manufacturing operation in Germany. Dark reports $100,000 of taxable income from Dunkel on its U.S. tax return, along with $400,000 of taxable income from its U.S. operations. Dark paid $40,000 in German income taxes related to the $100,000 of Dunkel income. Assuming a U.S. tax rate of 35%, what is Dark's U.S. tax liability after any allowable foreign tax credits?

Which of the following situations requires the filing of an information return with the U.S. government?

Amber, Inc., a domestic corporation receives a $150,000 cash dividend from Starke, Ltd. Amber owns 15% of Starke. Starke's post-1986 E & P is $2 million and it has paid foreign taxes of $1 million attributable to that E & P. What is Amber's gross income related to the Starke dividend?

Subpart F income includes portfolio income like dividends and interest.

Yvonne is a citizen of France and does not have permanent resident status in the United States. During the last three years she has spent a number of days in the United States. Is Yvonne treated as a U.S. resident for the current year?

Discuss the primary purposes of income tax treaties.

USCo, a domestic corporation, receives $100,000 of foreign-source passive income on which foreign taxes of $5,000 are withheld. Its worldwide taxable income is $700,000 and its U.S. tax liability before the foreign tax credit is $245,000. What is USCo's allowed foreign tax credit?

The IRS can use § 482 reallocations to assure that transactions between related parties are properly reflected in a tax return.

USCo, a domestic corporation, has worldwide taxable income of $1,500,000, including a $300,000 dividend from ForCo, a wholly-owned foreign corporation. ForCo's post-1986 undistributed earnings and profits are $16 million and it has paid $10 million of foreign income taxes attributable to these earnings. What is USCo's deemed paid foreign tax credit related to the dividend received (before consideration of any limitation) ?

Section 482 is used by the Treasury to:

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.

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

Which of the following statements regarding foreign persons not engaged in a U.S. trade or business is true?

"Inbound" and "offshore" transfers are exempt from taxation under § 367.