Question 1

Jose, a U.S.citizen, has taxable income from U.S.sources of $15,000 and taxable income from a foreign country of $35,000.Assume the U.S.tax rate is 25% and Jose paid $12,000 in taxes to the foreign country.What foreign tax credit can be claimed by Jose?

Accepted Answer

The answer of Jose, a U.S.citizen, has taxable income from...

Question 2

In accounting for multinational corporations,

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SFAS 109 allows the parent to exclude taxes on repatriated foreign earnings if they will not be repatriated in the foreseeable future. Option A is incorrect as SFAS 109 allows companies to recognize deferred tax assets for foreign tax credits, but not for taxes on repatriation of foreign earnings. Option B is incorrect as the deferral of foreign earnings is a permanent difference. Option D is incorrect as a corporation with excess foreign tax credits will record a deferred tax asset, not a liability.

Question 3

Which of the following statements is incorrect?

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The answer of Which of the following statements is incorrect?
...

Question 4

Identify which of the following statements is true.

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The answer of Identify which of the following statements is...

Question 5

What are the consequences of classification as a corporate inversion?

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The answer of What are the consequences of classification as...

Question 6

Which of the following is required in order for a transaction to be considered a corporate inversion?

Accepted Answer

All of the above conditions are required for a transaction to be considered a corporate inversion. A foreign corporation acquiring substantially all of the assets of a U.S. corporation alone does not constitute a corporate inversion. Similarly, if former U.S. shareholders do not own 80% or more of the stock in the foreign corporation, it will not be considered a corporate inversion. Lastly, the former U.S. company and its affiliates not conducting substantial business in the foreign country of incorporation is also a necessary condition for a transaction to be classified as a corporate inversion.

Question 7

Michael, a U.S.citizen, earned $100,000 of foreign-earned income and no other U.S.or foreign income in 2013.He also incurred $10,000 of employment-related expenses, none of which were reimbursed.If the full foreign-earned income exclusion is utilized, calculate the deductible employment-related expense (before the 2% nondeductible floor).

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The answer of Michael, a U.S.citizen, earned $100,000 of foreign-earned...

Question 8

Jacque, a single nonresident alien, is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has $75,000 of sales income earned while in the United States and $30,000 of non-U.S.sales income earned while he was outside the United States.How will the income be taxed and how will the tax be collected?

Accepted Answer

The answer of Jacque, a single nonresident alien, is in...

Question 9

A nonresident alien cannot

Accepted Answer

Nonresident aliens can elect to be treated as resident aliens in several scenarios, including being married to a resident alien or after satisfying the substantial presence test. However, they cannot elect to be treated as a resident alien for the calendar year before they meet the substantial presence test if they are unmarried. This is because the election typically depends on meeting certain criteria, such as being married to a U.S. citizen or resident alien or meeting the substantial presence test, which involves being physically present in the U.S. on at least 31 days during the current year and 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting all the days of physical presence in the current year, 1/3 of the days in the first year before the current year, and 1/6 of the days in the second year before the current year.

Question 10

A foreign corporation with a single class of stock is owned equally by Jericho Corporation, a U.S.corporation, and Joshua, a nonresident alien.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

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The answer of A foreign corporation with a single class...

Question 11

Marcella, an alien individual, is present in the United States for 122 days this year and 122 days each in the past two years.Does she satisfy both the 31-day and 183-day requirements for U.S.Residency status?

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The answer of Marcella, an alien individual, is present in...

Question 12

Jacque, a single nonresident alien, is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has a $15,000 capital gain on the sale of stock in a U.S.corporation while he was in the United States.The capital gain is not connected to his trade or business.How will the capital gain be taxed and how will the tax be collected?

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The answer of Jacque, a single nonresident alien, is in...

Question 13

Cane Corporation owns 45% of the stock of Edmonton Airline Corporation.In its first year of operations, Edmonton Airline, a Canadian corporation, reports $400,000 of E&P and pays a $100,000 dividend to Cane Corporation.Edmonton Airline pays $50,000 in Canadian income taxes.All amounts are expressed in U.S.dollars.What is Cane Corporation's U.S.tax liability as a result of receiving the dividend? (Assume a 34% U.S.corporate tax rate.)

Accepted Answer

The answer of Cane Corporation owns 45% of the stock...

Question 14

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark.Bert, Ernie, and Mark are U.S.citizens, and Xi Yong is a nonresident alien.Bert is Ernie's son.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

The answer of A foreign corporation with a single class...

Question 15

A taxpayer may make the election to either deduct or take a credit for foreign income taxes

Accepted Answer

A taxpayer may make the election to either deduct or take a credit for foreign income taxes annually. This allows the taxpayer to choose the method that is most beneficial for each tax year.

Question 16

A foreign corporation with a single class of stock is owned equally by Jericho Corporation, a U.S.corporation, and Joshua, a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

The answer of A foreign corporation with a single class...

Question 17

Jacque, a single nonresident alien, is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has $3,000 of interest income earned on a bank account in his home county and $1,800 of interest income earned on a bank account located in Addison, Illinois.How will the dividend be taxed and how will the tax be collected?

Accepted Answer

The answer of Jacque, a single nonresident alien, is in...

Question 18

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark.Bert, Ernie, and Mark are U.S.citizens, and Xi Yong is a nonresident alien.The shareholders are not related.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

The answer of A foreign corporation with a single class...

Question 19

Jacque, a single nonresident alien, is in the United States for 80 days in the current year engaging in the conduct of a U.S.trade or business.Jacque has $30,000 of dividend income paid by a U.S.corporation on a stock investment portfolio unrelated to his trade or business.How will the dividend be taxed and how will the tax be collected?

Accepted Answer

The answer of Jacque, a single nonresident alien, is in...

Question 20

Darlene, a U.S.citizen, has foreign-earned income of $150,000 and employment-related expenses of $15,000.Darlene earns no other income.Darlene also has $12,000 of itemized deductions not directly related to the foreign-earned income.She can exclude $97,600 of foreign-earned income.Darlene incurs $33,750 of Country C income taxes on $150,000 of Country C taxable income.How much of Darlene's foreign income taxes are noncreditable?

Accepted Answer

The answer of Darlene, a U.S.citizen, has foreign-earned income of...

Quiz 16: US Taxation of Foreign-Related Transactions

Jose, a U.S.citizen, has taxable income from U.S.sources of $15,000 and taxable income from a foreign country of $35,000.Assume the U.S.tax rate is 25% and Jose paid $12,000 in taxes to the foreign country.What foreign tax credit can be claimed by Jose?

In accounting for multinational corporations,

Which of the following statements is incorrect?

Identify which of the following statements is true.

What are the consequences of classification as a corporate inversion?

Which of the following is required in order for a transaction to be considered a corporate inversion?

A nonresident alien cannot

A foreign corporation with a single class of stock is owned equally by Jericho Corporation, a U.S.corporation, and Joshua, a nonresident alien.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Marcella, an alien individual, is present in the United States for 122 days this year and 122 days each in the past two years.Does she satisfy both the 31-day and 183-day requirements for U.S.Residency status?

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark.Bert, Ernie, and Mark are U.S.citizens, and Xi Yong is a nonresident alien.Bert is Ernie's son.Is the foreign corporation a controlled foreign corporation (CFC)?

A taxpayer may make the election to either deduct or take a credit for foreign income taxes

A foreign corporation with a single class of stock is owned equally by Jericho Corporation, a U.S.corporation, and Joshua, a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark.Bert, Ernie, and Mark are U.S.citizens, and Xi Yong is a nonresident alien.The shareholders are not related.Is the foreign corporation a controlled foreign corporation (CFC)?