Question 1

Julio,a nonresident alien,realizes a gain on the sale of commercial real estate located in Omaha.The real estate was sold to Mariana,Julio's cousin who is also a nonresident alien.Julio recognizes foreign-source income from the sale because his home country is not the U.S.

Accepted Answer

A) True 
 B)False

Question 2

Zhang,an NRA who is not a resident of a treaty country,receives taxable dividends of $50,000 from U.S.corporations.Zhang does not conduct a U.S.trade or business.Zhang's dividends are subject to withholding by the payor of:

Accepted Answer

A)  35%.
B)  30%.
C)  15%.
D)  0%.E) A) and D)
F) C) and D)

Question 3

The "residence of seller" rule is used in determining the sourcing of all gross income and deductions of a U.S.multinational business.

Accepted Answer

A) True 
 B)False

Question 4

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) None of the above
F) C) and D)

Question 5

Chang,an NRA,is employed by Fisher,Inc. ,a foreign corporation.In November,Chang spends 10 days in the United States performing consulting services for Fisher's U.S.branch.She earns $5,000 per month.A month includes 20 workdays.

Accepted Answer

A)  Chang has $2,500 U.S.-source income which is exempt from U.S.taxation,because she is in the U.S.for 90 days or less.
B)  Chang has $2,500 U.S.-source income which is exempt from U.S.taxation,because the amount paid to her is less than $3,000.
C)  Chang has $2,500 U.S.-source income,because her foreign employer has a U.S.branch.
D)  Chang has no U.S.-source income,under the commercial traveler exception.E) B) and D)
F) A) and D)

Question 6

Which of the following statements regarding the taxation of U.S.real property gains recognized by non-U.S.persons not engaged in a U.S.trade or business is false? Gains from the disposition of U.S.real property are:

Accepted Answer

A)  Not taxed to non-U.S.persons because real property gains are specifically exempt from U.S.taxation.
B)  Taxed to non-U.S.persons without regard to whether such non-U.S.persons are engaged in a U.S.trade or business.
C)  Taxed in the U.S.because such gains are treated as if they are effectively connected to a U.S.trade or business.
D)  Taxed to non-U.S.persons notwithstanding the general exemption of capital gains from U.S.taxation.E) All of the above
F) A) and C)

Question 7

Subpart F income includes portfolio income like dividends and interest.

Accepted Answer

A) True 
 B)False

Question 8

Yvonne is a citizen of France and does not have permanent resident status in the United States.During the last three years she has spent a number of days in the United States. Current year - 150 days First prior year - 150 days Second prior year - 90 days Is Yvonne treated as a U.S.resident for the current year?

Accepted Answer

A)  No,because Yvonne is a citizen of France.
B)  No,because Yvonne was not present in the United States at least 183 days during the current year.
C)  No,because although Yvonne was present in the United States at least 31 days during the current year,she was not present at least 183 days in a single year during the current or prior two years.
D)  Yes,because Yvonne was present in the United States at least 31 days during the current year and 215 days during the current and prior two years (using the appropriate fractions for the prior years) .E) A) and C)
F) A) and B)

Question 9

"Inbound" and "offshore" asset transfers by a U.S.business can be subject to immediate Federal income taxation under § 367.

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

A) True 
 B)False

Question 11

Match the definition with the correct term.
a.Inbound
b.Outbound
c.Allocation and apportionment
d.Qualified business unit
e.Tax haven
f.Income tax treaty
g.Section 482
-A business operation that accounts for profits and losses using its functional currency.

Accepted Answer

The answer of Match the definition with the correct term.
a.Inbound
b.Outbound
c.Allocation...

Question 12

Bryden,a controlled foreign corporation owned 100% by USCo,earned $900,000 in Subpart F income for the current year.Bryden's current year E & P is $350,000,and its accumulated E & P is $15 million.What is the current year Subpart F deemed dividend to USCo?

Accepted Answer

A)  $350,000
B)  $550,000
C)  $900,000
D)  $15 millionE) B) and C)
F) A) and B)

Question 13

USCo,a U.S.corporation,receives $700,000 of foreign-source passive income on which foreign taxes of $70,000 are withheld.Its worldwide taxable income is $1,500,000 and its U.S.tax liability before the foreign tax credit is $525,000.What is USCo's allowed foreign tax credit?

Accepted Answer

A)  $70,000
B)  $175,000
C)  $245,000
D)  $770,000E) B) and D)
F) All of the above

Exam 25: Taxation of International Transactions

Match the definition with the correct term. a.Inbound b.Outbound c.Allocation and apportionment d.Qualified business unit e.Tax haven f.Income tax treaty g.Section 482 -A business operation that accounts for profits and losses using its functional currency.

Correct Answer
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Bryden,a controlled foreign corporation owned 100% by USCo,earned $900,000 in Subpart F income for the current year.Bryden's current year E & P is $350,000,and its accumulated E & P is $15 million.What is the current year Subpart F deemed dividend to USCo?

Correct Answer
verified

Subpart F income includes portfolio income like dividends and interest.

Correct Answer
verified

Correct Answer
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Zhang,an NRA who is not a resident of a treaty country,receives taxable dividends of $50,000 from U.S.corporations.Zhang does not conduct a U.S.trade or business.Zhang's dividends are subject to withholding by the payor of:

Correct Answer
verified

The "residence of seller" rule is used in determining the sourcing of all gross income and deductions of a U.S.multinational business.

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements regarding the taxation of U.S.real property gains recognized by non-U.S.persons not engaged in a U.S.trade or business is false? Gains from the disposition of U.S.real property are:

Correct Answer
verified

"Inbound" and "offshore" asset transfers by a U.S.business can be subject to immediate Federal income taxation under § 367.

Correct Answer
verified

Correct Answer
verified

USCo,a U.S.corporation,receives $700,000 of foreign-source passive income on which foreign taxes of $70,000 are withheld.Its worldwide taxable income is $1,500,000 and its U.S.tax liability before the foreign tax credit is $525,000.What is USCo's allowed foreign tax credit?

Correct Answer
verified

Chang,an NRA,is employed by Fisher,Inc. ,a foreign corporation.In November,Chang spends 10 days in the United States performing consulting services for Fisher's U.S.branch.She earns $5,000 per month.A month includes 20 workdays.

Correct Answer
verified

Julio,a nonresident alien,realizes a gain on the sale of commercial real estate located in Omaha.The real estate was sold to Mariana,Julio's cousin who is also a nonresident alien.Julio recognizes foreign-source income from the sale because his home country is not the U.S.

Correct Answer
verified

Exam 25: Taxation of International Transactions

Match the definition with the correct term. a.Inbound b.Outbound c.Allocation and apportionment d.Qualified business unit e.Tax haven f.Income tax treaty g.Section 482 -A business operation that accounts for profits and losses using its functional currency.

Correct AnswerverifiedShow Answer

Bryden,a controlled foreign corporation owned 100% by USCo,earned $900,000 in Subpart F income for the current year.Bryden's current year E & P is $350,000,and its accumulated E & P is $15 million.What is the current year Subpart F deemed dividend to USCo?

Correct AnswerverifiedShow Answer

Subpart F income includes portfolio income like dividends and interest.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Zhang,an NRA who is not a resident of a treaty country,receives taxable dividends of $50,000 from U.S.corporations.Zhang does not conduct a U.S.trade or business.Zhang's dividends are subject to withholding by the payor of:

Correct AnswerverifiedShow Answer

The "residence of seller" rule is used in determining the sourcing of all gross income and deductions of a U.S.multinational business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements regarding the taxation of U.S.real property gains recognized by non-U.S.persons not engaged in a U.S.trade or business is false? Gains from the disposition of U.S.real property are:

Correct AnswerverifiedShow Answer

"Inbound" and "offshore" asset transfers by a U.S.business can be subject to immediate Federal income taxation under § 367.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

USCo,a U.S.corporation,receives $700,000 of foreign-source passive income on which foreign taxes of $70,000 are withheld.Its worldwide taxable income is $1,500,000 and its U.S.tax liability before the foreign tax credit is $525,000.What is USCo's allowed foreign tax credit?

Correct AnswerverifiedShow Answer

Chang,an NRA,is employed by Fisher,Inc. ,a foreign corporation.In November,Chang spends 10 days in the United States performing consulting services for Fisher's U.S.branch.She earns $5,000 per month.A month includes 20 workdays.

Correct AnswerverifiedShow Answer

Julio,a nonresident alien,realizes a gain on the sale of commercial real estate located in Omaha.The real estate was sold to Mariana,Julio's cousin who is also a nonresident alien.Julio recognizes foreign-source income from the sale because his home country is not the U.S.

Correct AnswerverifiedShow Answer

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