FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Multi-Juris-Dictional Taxation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

True/False

Review LaterAdd Note

Review Later

The United States has in force income tax treaties with about 70 countries.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

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

A) Non-U.S.persons not engaged in a U.S.trade or business are indifferent as to whether any of their income is U.S.source.
B) All income earned by non-U.S.persons not engaged in a U.S.trade or business is treated as foreign source.
C) U.S.-source income is not subject to withholding so long as such income is not treated as effectively connected with a U.S.trade or business.
D) Certain U.S.-source investment income earned by non-U.S.persons not engaged in a U.S.trade or business may be subject to a U.S.withholding tax.

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 3

Essay

Review LaterAdd Note

Discuss the primary purposes of income tax treaties.

OutCo, a controlled foreign corporation in Meena (located outside the U.S.) , earns $600,000 in net interest and dividend income from investments in the bonds and stock of unrelated companies.All of the dividend payors are located in Meena.OutCo's Subpart F income for the year is:

Waldo, Inc., a U.S.corporation, owns 100% of Orion, Ltd., a foreign corporation.Orion earns only general basket income.During the current year, Orion paid Waldo a $5,000 dividend.The foreign tax credit associated with this dividend is $3,000.The foreign jurisdiction requires a withholding tax of 10%, so Waldo received only $4,500 in cash as a result of the dividend.What is Waldo's total U.S.gross income reported as a result of the $4,500 cash received?

An assembly worker earns a $50,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $65,000 for this employee.

Which of the following statements regarding a non-U.S.person's U.S.tax consequences is true?

WaterCo, a domestic corporation, purchases inventory for resale from unrelated distributors outside the U.S.It resells this inventory to U.S.customers, with title passing inside the United States.What is the source of WaterCo's inventory sales income?

Columbia, Inc., a U.S.corporation, receives a $150,000 cash dividend from Starke, Ltd.Columbia owns 15% of Starke.Starke's E & P is $2 million and it has paid foreign taxes of $750,000 attributable to that E & P.What is Columbia's gross income related to the Starke dividend?

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.

Jokerz, a CFC of a U.S.parent, generated $80,000 Subpart F foreign base company services income in its first year of operations.The next year, Jokerz distributes $50,000 cash to the parent, from those service profits.The parent is taxed on $0 in the first year (tax deferral rules apply) and $50,000 in the second year.

Which of the following statements regarding the U.S.taxation of non-U.S.persons is true?

Nonbusiness income receives tax-exempt treatment under all state corporate income taxes.

General Corporation is taxable in a number of states.This year, General made a $100,000 sale from its A headquarters to a customer in B.This activity is not sufficient for General to create nexus with B.State B applies a throwback rule, but State A does not.In which state(s) will the sale be included in the sales factor numerator?

Which of the following statements regarding income sourcing is not correct?

Typical indicators of income-tax nexus include the presence of customers in the state.

Present, Inc., a U.S.corporation, owns 60% of the stock of Past, Inc., a foreign corporation.For the current year, Present receives a dividend of $80,000 from Past.Past's pools of E & P (after taxes) and foreign taxes are $4,000,000 and $500,000, respectively.What is Present's total gross income from this dividend if it elects to claim the FTC for deemed-paid foreign taxes?

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.In which state(s) will the sale be included in the sales factor numerator?

Krebs, Inc., a U.S.corporation, operates an unincorporated branch manufacturing operation in the U.K.Krebs, Inc., reports $900,000 of taxable income from the U.K.branch on its U.S.tax return, along with $1,600,000 of taxable income from its U.S.operations.The U.K.branch income is all general limitation basket income.Krebs paid $270,000 in U.K.income taxes related to the $900,000 in branch income.Assuming a U.S.tax rate of 35%, what is Krebs' U.S.tax liability after any allowable foreign tax credits?

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 (before any § 78 gross-up) :