Question 1

Match the definition with the correct term.
-Rule that requires determination of the dividend equivalent amount.

Accepted Answer

The term that matches the definition is Branch profits tax.

Question 2

Match the definition with the correct term.
-Individual who is not a U.S. citizen or resident.

Accepted Answer

A nonresident alien is an individual who is not a U.S. citizen or resident.

Answer: A 
 An expatriate is someone who renounces their citizenship or leaves their country of origin, often to work in a foreign country.

Answer: E 
 Branch profits tax is a tax on the repatriation of earnings from a foreign branch of a U.S. corporation.

Answer: F 
 Effectively connected income is income generated by a foreign person from a U.S. trade or business, and is subject to U.S. taxation.

Question 3

Match the definition with the correct term.
-Activity that creates the potential for effectively connected income.

Accepted Answer

U.S. trade or business

Answer: F 
 Effectively connected income

Question 4

Match the definition with the correct term.
-An individual who gives up U.S. citizenship to avoid U.S. income taxes.

Accepted Answer

An individual who gives up U.S. citizenship to avoid U.S. income taxes is commonly referred to as an expatriate.

Answer: C
 A nonresident alien is an individual who is not a U.S. citizen and does not meet the substantial presence test for residency in the United States.

Answer: D
 U.S. trade or business refers to the operations of a U.S. business entity or activity that generates income in the United States.

Answer: E
 The branch profits tax is a tax imposed on foreign corporations that conduct business in the United States through a subsidiary or branch, with the tax calculated based on a percentage of the corporation's earnings and profits.

Answer: F
 Effectively connected income is income earned by a foreign person or entity from a U.S. trade or business, subject to U.S. income tax.

Question 5

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once.
-Ownership percentage required before a deemed paid foreign tax credit is allowed.

Accepted Answer

The answer of Match the definition with the correct term....

Question 6

Match the definition with the correct term.
-A non-U.S. citizen who holds a "green card."

Accepted Answer

A "green card" holder is considered a resident alien for tax purposes in the United States, not an expatriate, nonresident alien, U.S. trade or business, or effectively connected income. This status allows them to live and work permanently in the U.S.

Question 7

Match the definition with the correct term.
-Income of foreign person taxed through filing of a U.S. tax return with deductions allowed against gross income.

Accepted Answer

Effectively connected income (ECI) refers to the income of a foreign person that is connected with the conduct of a trade or business in the United States. Such income is taxed on a net basis, meaning deductions are allowed against gross income, through the filing of a U.S. tax return.

Quiz 9: Taxation of International Transactions

Match the definition with the correct term. -Rule that requires determination of the dividend equivalent amount.

Match the definition with the correct term. -Individual who is not a U.S. citizen or resident.

Match the definition with the correct term. -Activity that creates the potential for effectively connected income.

Match the definition with the correct term. -An individual who gives up U.S. citizenship to avoid U.S. income taxes.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once. -Ownership percentage required before a deemed paid foreign tax credit is allowed.

Match the definition with the correct term. -A non-U.S. citizen who holds a "green card."

Match the definition with the correct term. -Income of foreign person taxed through filing of a U.S. tax return with deductions allowed against gross income.