Question 1

In which of the following independent situations would Slane, a foreign corporation, be classified as a controlled foreign corporation? The Slane stock is directly owned 12% by Jen, 10% by Kathy, 12% by Leslie, 10% by David, 8% by Ben, and 48% by Mike.

Accepted Answer

A)  Jen, Kathy, Leslie, David, Ben, and Mike are all U.S.citizens.
B)  Jen, Kathy, Leslie, David, and Ben are all U.S.citizens.David is married to Kathy.Mike is a foreign resident and citizen.
C)  Jen, Kathy, Leslie, David, and Ben are all U.S.citizens.Ben is Mike's son.Mike is a foreign resident and citizen.
D)  Jen, Kathy, Leslie, David, and Ben are all U.S.citizens.Mike is a foreign resident and citizen.E) C) and D)
F) A) and D)

Question 2

The throwback rule requires that:

Accepted Answer

A)  Sales of tangible personal property are attributed to the state where they originated, if the taxpayer is not taxable in the state of destination.
B)  When an asset is sold, any recognized gain from depreciation recapture is taxed at the rates that applied when the depreciation deductions were claimed.
C)  Sales of services are attributed to the state of the seller's domicile.
D)  Capital gain/loss is attributed to the state of the seller's domicile.E) A) and C)
F) A) and B)

Question 3

With respect to income generated by non-U.S.persons, does the U.S.apply a "worldwide" or a "territorial" approach.Be specific.

Accepted Answer

U.S.persons are subject to worldwide tax...

Question 4

In international corporate income taxation, what are the uses of the "sourcing rules" in computing Federal taxable income?

Accepted Answer

The sourcing of income and deductions in...

Question 5

The starting point in computing state taxable income generally is .

Accepted Answer

Federal ta...

Question 6

Wellington, Inc., a U.S.corporation, owns 30% of a CFC that has $50 million of earnings and profits for the current year.Included in that amount is $20 million of Subpart F income.Wellington has been a CFC for the entire year and makes no distributions in the current year.Wellington must include in gross income:

Accepted Answer

A)  $0.
B)  $6 million.
C)  $20 million.
D)  $50 million.E) All of the above
F) A) and B)

Question 7

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

Accepted Answer

A)  Foreign persons are subject to potential withholding taxes on the gross amount of U.S.-source investment income.
B)  Foreign persons with any U.S.-source income are taxed on net investment income after expenses) .
C)  Foreign persons are not subject to U.S.tax if not engaged in a U.S.trade or business.
D)  Foreign persons with only U.S.-source investment income are exempt from U.S.tax.E) B) and C)
F) A) and D)

Question 8

Under common terminology, a unitary group files a combined/consolidated) state income tax return.

Accepted Answer

The answer of Under common terminology, a unitary group files...

Question 9

A controlled foreign corporation CFC)  realizes Subpart F income from:

Accepted Answer

A)  Purchase of inventory from unrelated U.S.person and sale outside the CFC country.
B)  Purchase of inventory from a related U.S.person and sale outside the CFC country.
C)  Services performed for the U.S.parent in a country in which the CFC was organized.
D)  Services performed on behalf of an unrelated party in a country outside the country in which the CFC was organized.E) A) and B)
F) A) and C)

Question 10

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

Accepted Answer

A)  They allow for a deferral of non-U.S.-source income from U.S.taxation.
B)  They provide certainty as to the U.S.income tax treatment of cross-border transactions.
C)  They prevent shifting of income from the U.S.to high-tax non-U.S.jurisdictions.
D)  They prevent shifting of income from the U.S.to low-tax non-U.S.jurisdictions.E) All of the above
F) A) and C)

Question 11

In most states, a taxpayer's income is apportioned on the basis of a formula measuring the extent of business contact, and allocated according to the location of property owned or used.

Accepted Answer

A) True 
 B)False

Question 12

Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B.For the taxable year, the corporation's activities within the two states were as follows.
  Dott has determined that it is subject to tax in both A and B.Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll.The rates of corporate income tax imposed in A and B are 7% and 10%, respectively.Determine Dott's state income tax liability.

Accepted Answer

STATE A IN...

Question 13

By making a water's edge election, the multinational taxpayer can limit the reach of unitary principles to the apportionment factors and income of its U.S.and E.U.affiliates.

Accepted Answer

A) True 
 B)False

Question 14

Given the following information, determine if FanCo, a foreign corporation, is a CFC.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Murray, Nancy, and Patricia are U.S.sha...

Question 15

The most commonly used state income tax apportionment formula is:

Accepted Answer

A)  Sales factor only.
B)  Sales factor double-weighted.
C)  Sales factor equally weighted with property and payroll.
D)  Payroll factor only.E) C) and D)
F) All of the above

Question 16

The following income of a foreign corporation is not subject to the regular U.S.corporate income tax rates.

Accepted Answer

A)  FIRPTA gains.
B)  Capital gains effectively connected with a U.S.trade or business.
C)  Net long-term capital gains, where no U.S.trade or business exists.
D)  Interest income effectively connected with a U.S.trade or business.E) A) and B)
F) A) and C)

Question 17

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates.
Hint: use the terms allocation and apportionment in your comments.

Accepted Answer

Generally, business income is apportione...

Question 18

ForCo, a non-U.S.corporation based in Aldonza, purchases widgets from USCo, Inc., its U.S.parent corporation.The widgets are sold by ForCo to an unrelated foreign corporation in Aldonza.The income from sale of the widgets by ForCo is Subpart F foreign base company sales income.

Accepted Answer

A) True 
 B)False

Question 19

General Corporation is taxable in a number of states.This year, General made a $100,000 sale from its A headquarters to the State B office of the FBI, the Federal Bureau of Investigation.In which states)  will the sale be included in the sales factor numerator?

Accepted Answer

A)  $0 in A and $0 in B.
B)  $50,000 in A, with the balance exempted from other states' sales factors under the Colgate doctrine.
C)  $100,000 in A.
D)  $100,000 in B.E) A) and D)
F) C) and D)

Question 20

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Accepted Answer

A) True 
 B)False

Exam 16: Multijurisdictional Taxation

By making a water's edge election, the multinational taxpayer can limit the reach of unitary principles to the apportionment factors and income of its U.S.and E.U.affiliates.

Correct Answer
verified

Under common terminology, a unitary group files a combined/consolidated) state income tax return.

Correct Answer
verified

In international corporate income taxation, what are the uses of the "sourcing rules" in computing Federal taxable income?

Correct Answer
verified
The sourcing of income and deductions in...
View Answer

A controlled foreign corporation CFC) realizes Subpart F income from:

Correct Answer
verified

With respect to income generated by non-U.S.persons, does the U.S.apply a "worldwide" or a "territorial" approach.Be specific.

Correct Answer
verified
U.S.persons are subject to worldwide tax...
View Answer

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Correct Answer
verified
Generally, business income is apportione...
View Answer

Correct Answer
verified

ForCo, a non-U.S.corporation based in Aldonza, purchases widgets from USCo, Inc., its U.S.parent corporation.The widgets are sold by ForCo to an unrelated foreign corporation in Aldonza.The income from sale of the widgets by ForCo is Subpart F foreign base company sales income.

Correct Answer
verified

General Corporation is taxable in a number of states.This year, General made a $100,000 sale from its A headquarters to the State B office of the FBI, the Federal Bureau of Investigation.In which states) will the sale be included in the sales factor numerator?

Correct Answer
verified

The starting point in computing state taxable income generally is .

Correct Answer
verified
Federal ta...
View Answer

Given the following information, determine if FanCo, a foreign corporation, is a CFC.

Correct Answer
verified
Murray, Nancy, and Patricia are U.S.sha...
View Answer

The throwback rule requires that:

Correct Answer
verified

In which of the following independent situations would Slane, a foreign corporation, be classified as a controlled foreign corporation? The Slane stock is directly owned 12% by Jen, 10% by Kathy, 12% by Leslie, 10% by David, 8% by Ben, and 48% by Mike.

Correct Answer
verified

The most commonly used state income tax apportionment formula is:

Correct Answer
verified

In most states, a taxpayer's income is apportioned on the basis of a formula measuring the extent of business contact, and allocated according to the location of property owned or used.

Correct Answer
verified

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Correct Answer
verified

The following income of a foreign corporation is not subject to the regular U.S.corporate income tax rates.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
STATE A IN...
View Answer

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

Correct Answer
verified

Exam 16: Multijurisdictional Taxation

By making a water's edge election, the multinational taxpayer can limit the reach of unitary principles to the apportionment factors and income of its U.S.and E.U.affiliates.

Correct AnswerverifiedShow Answer

Under common terminology, a unitary group files a combined/consolidated) state income tax return.

Correct AnswerverifiedShow Answer

In international corporate income taxation, what are the uses of the "sourcing rules" in computing Federal taxable income?

Correct AnswerverifiedThe sourcing of income and deductions in...View AnswerShow Answer

A controlled foreign corporation CFC) realizes Subpart F income from:

Correct AnswerverifiedShow Answer

With respect to income generated by non-U.S.persons, does the U.S.apply a "worldwide" or a "territorial" approach.Be specific.

Correct AnswerverifiedU.S.persons are subject to worldwide tax...View AnswerShow Answer

Discuss how a multistate business divides up its corporate taxable income among the states in which it operates. Hint: use the terms allocation and apportionment in your comments.

Correct AnswerverifiedGenerally, business income is apportione...View AnswerShow Answer

Correct AnswerverifiedShow Answer

ForCo, a non-U.S.corporation based in Aldonza, purchases widgets from USCo, Inc., its U.S.parent corporation.The widgets are sold by ForCo to an unrelated foreign corporation in Aldonza.The income from sale of the widgets by ForCo is Subpart F foreign base company sales income.

Correct AnswerverifiedShow Answer

General Corporation is taxable in a number of states.This year, General made a $100,000 sale from its A headquarters to the State B office of the FBI, the Federal Bureau of Investigation.In which states) will the sale be included in the sales factor numerator?

Correct AnswerverifiedShow Answer

The starting point in computing state taxable income generally is .

Correct AnswerverifiedFederal ta...View AnswerShow Answer

Given the following information, determine if FanCo, a foreign corporation, is a CFC.

Correct Answerverified Murray, Nancy, and Patricia are U.S.sha...View AnswerShow Answer

The throwback rule requires that:

Correct AnswerverifiedShow Answer

In which of the following independent situations would Slane, a foreign corporation, be classified as a controlled foreign corporation? The Slane stock is directly owned 12% by Jen, 10% by Kathy, 12% by Leslie, 10% by David, 8% by Ben, and 48% by Mike.

Correct AnswerverifiedShow Answer

The most commonly used state income tax apportionment formula is:

Correct AnswerverifiedShow Answer

In most states, a taxpayer's income is apportioned on the basis of a formula measuring the extent of business contact, and allocated according to the location of property owned or used.

Correct AnswerverifiedShow Answer

A typical state taxable income subtraction modification is the interest income earned from another state's bonds.

Correct AnswerverifiedShow Answer

The following income of a foreign corporation is not subject to the regular U.S.corporate income tax rates.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedSTATE A IN...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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The sourcing of income and deductions in...
View Answer

Correct Answer
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Correct Answer
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U.S.persons are subject to worldwide tax...
View Answer

Correct Answer
verified
Generally, business income is apportione...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
Federal ta...
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Correct Answer
verified
Murray, Nancy, and Patricia are U.S.sha...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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STATE A IN...
View Answer

Correct Answer
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