FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 16: Multijurisdictional Taxation

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

In allocating interest expense between U.S.and foreign sources, a taxpayer elects to use either the tax basis of the income-producing assets or their fair market values.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

Nico lives in California.She was born in Peru but holds a green card.Nico is a nonresident alien NRA).

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

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

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.

In determining taxable income for state income tax purposes, interest income from Federal bonds typically constitutes an) modification.

Under P.L.86-272, the taxpayer is exempt from state taxes on income resulting from the mere solicitation of orders for the sale of stocks and bonds.

The IRS can use § 482 reallocations to assure that transactions between related parties are properly reflected in a tax return.

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

Olaf, a citizen of Norway with no trade or business activities in the United States, sells at a gain 200 shares of MicroShift, Inc., a U.S.company.The sale takes place through Olaf's broker in Oslo.How is this gain treated for U.S.tax purposes?

Without the foreign tax credit, double taxation would result when:

Waltz, Inc., a U.S.taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000.Waltz's worldwide taxable income is $450,000, on which it owes U.S.taxes of $94,500 before FTC.Waltz's FTC is $50,000.

State Q wants to increase its income tax collections, but politically it would be unwise to raise taxes on in-state individuals or businesses.Q currently follows all UDITPA rules and employs an equally weighted three-factor apportionment formula.Q allocates nonbusiness income amounts. Identify some changes to the income tax apportionment formula that would shift the scheduled income tax increases to out-of-state businesses.

U.S.income tax treaties typically:

U.S.income tax treaties can be described as:

Match each of the following terms with the appropriate description, in the state income tax formula.Apply the UDITPA rules in your responses. -State-level NOL.

Peanut, Inc., a U.S.corporation, receives $500,000 of foreign-source interest income, on which foreign taxes of $5,000 are withheld.Peanut's worldwide taxable income is $900,000, and its U.S.Federal income tax liability before FTC is $270,000.What is Peanut's foreign tax credit?

Almost all of the states allow treatment to an LLC for income tax purposes.

Property taxes generally are collected by local taxing jurisdictions, not the state or Federal governments.

A tax haven often is:

Mitch, an NRA, sells a building in Omaha for $1 million.His basis in the building is zero for both regular tax and AMT purposes.Mitch has no other contact with the U.S.other than the ownership of the building.How much Federal income tax is due from Mitch on the sale?