Question 1

Match the definition with the correct term
-Treasury powers over transfer pricing.

Accepted Answer

Treasury powers over transfer pricing are controlled through Section 482 of the Internal Revenue Code.

Question 2

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Owner of shares counted in determining whether a foreign corporation is a controlled foreign corporation.

Accepted Answer

"U.S. shareholder" is the correct term for the owner of shares counted in determining whether a foreign corporation is a controlled foreign corporation.

Question 3

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 4

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-A net loss in all foreign tax credit limitation baskets.

Accepted Answer

Overall foreign loss is the term used to describe a net loss in all foreign tax credit limitation baskets. None of the other given terms match this definition.

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
-A deemed paid foreign tax credit is included in gross income.

Accepted Answer

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

Question 6

Match the definition with the correct term
-A country with very low or no income tax.

Accepted Answer

Tax haven is a country or jurisdiction with very low or no income tax.

Question 7

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Maximum years for a foreign tax credit carryback.

Accepted Answer

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

Question 8

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Foreign tax credit allowed when a foreign corporation makes a distribution to its parent corporation.

Accepted Answer

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

Question 9

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Number of foreign tax credit limitation baskets.

Accepted Answer

The number of foreign tax credit limitation baskets is two.

Question 10

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Portfolio income treated as Subpart F income.

Accepted Answer

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

Question 11

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Maximum years for a foreign tax credit carryforward.

Accepted Answer

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

Question 12

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Foreign tax credit allowed for withholding taxes on payments from foreign sources.

Accepted Answer

Direct credit refers to a dollar-for-dollar reduction in U.S. tax liability based on taxes paid or accrued to a foreign country or U.S. possession. This includes withholding taxes on payments from foreign sources. Indirect credit "only indirectly" lowers U.S. tax liability and is not applicable to this definition. The other terms do not match the given definition.

Question 13

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Ownership threshold for U.S. shareholders to be deemed a controlled foreign corporation.

Accepted Answer

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

Question 14

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

Accepted Answer

A resident is someone who is not a U.S. citizen but holds a "green card," allowing them to reside permanently in the U.S.

Question 15

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

Accepted Answer

Nonresident alien refers to an individual who is not a U.S. citizen or resident.

Answer: A 
 Expatriate refers to a person who has renounced their citizenship or has moved out of their country for a long period of time.

Answer: B 
 Resident refers to a person who is a citizen of the U.S. or has met the substantial presence test and resides in the U.S. for a certain period of time.

Answer: D 
 U.S. trade or business is any trade or business conducted in the U.S.

Answer: E 
 Branch profits tax is a tax on certain earnings of foreign corporations derived from conducting a U.S. trade or business through a U.S. branch or foreign corporation.

Answer: F 
 Effectively connected income refers to the income earned by a foreign person who is engaged in a U.S. trade or business and is subject to U.S. taxation.

Question 16

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-A non-U.S. subsidiary whose income may be taxed to the U.S. parent before repatriation.

Accepted Answer

The definition matches with the term "controlled foreign corporation"

Question 17

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-A CFC's profits from sales of goods and services.

Accepted Answer

Foreign base company income refers to the profits from sales of goods and services made by a controlled foreign corporation in a foreign country.

Answer: C 
 Controlled foreign corporation refers to a foreign corporation where more than 50% of the total combined voting power or value of its stock is owned by U.S. shareholders.

Answer: D 
 U.S. shareholder refers to a U.S. person who owns more than 10% of the total combined voting power of a controlled foreign corporation.

Answer: E 
 Previously taxed income refers to the earnings of a controlled foreign corporation that have already been subjected to U.S. taxation.

B, F, and H do not match any of the given definitions.

Question 18

Match the definition with the correct term
-A business operation that accounts for profits and losses using its functional currency.

Accepted Answer

The term that matches the definition of a business operation that accounts for profits and losses using its functional currency is qualified business unit.

Question 19

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once
-Upon repatriation to a CFC, it does not create dividend income.

Accepted Answer

Previously taxed income (PTI) refers to earnings of a Controlled Foreign Corporation (CFC) that have already been taxed to the U.S. shareholder under the Subpart F or Global Intangible Low-Taxed Income (GILTI) provisions. Upon repatriation, these earnings do not create dividend income because they have already been included in the gross income of the U.S. shareholder.

Question 20

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

Accepted Answer

U.S. trade or business refers to a business conducted within the U.S. that creates the potential for effectively connected income.

Answer: F
 Effectively connected income refers to income generated from a U.S. trade or business that is subject to U.S. taxation.

Answer: E
 Branch profits tax is a tax applied to the effectively connected income of foreign corporations operating in the U.S.

Answer: B
 Resident refers to an individual who meets the substantial presence test and is therefore subject to U.S. taxation on worldwide income.

Answer: C
 Nonresident alien refers to an individual who is not a U.S. citizen and does not meet the substantial presence test, and is therefore only subject to U.S. taxation on U.S.-source income.

Answer: A
 An expatriate refers to a U.S. citizen who has renounced their citizenship and is living abroad, but may still be subject to U.S. taxation on certain types of income.

Quiz 9: Taxation of International Transactions

Match the definition with the correct term -Treasury powers over transfer pricing.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Owner of shares counted in determining whether a foreign corporation is a controlled foreign corporation.

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. Not all of the terms have a match. A definition can be used more than once -A net loss in all foreign tax credit limitation baskets.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -A deemed paid foreign tax credit is included in gross income.

Match the definition with the correct term -A country with very low or no income tax.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Maximum years for a foreign tax credit carryback.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Foreign tax credit allowed when a foreign corporation makes a distribution to its parent corporation.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Number of foreign tax credit limitation baskets.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Portfolio income treated as Subpart F income.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Maximum years for a foreign tax credit carryforward.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Foreign tax credit allowed for withholding taxes on payments from foreign sources.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Ownership threshold for U.S. shareholders to be deemed a controlled foreign corporation.

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

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

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -A non-U.S. subsidiary whose income may be taxed to the U.S. parent before repatriation.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -A CFC's profits from sales of goods and services.

Match the definition with the correct term -A business operation that accounts for profits and losses using its functional currency.

Match the definition with the correct term. Not all of the terms have a match. A definition can be used more than once -Upon repatriation to a CFC, it does not create dividend income.

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