Question 1

Section 482 is used by the Treasury to:

Accepted Answer

A)  Force taxpayers to use arms-length transfer pricing on transactions between related parties.
B)  Reallocate income, deductions, etc., to a related taxpayer to minimize tax liability.
C)  Increase information that is reported about U.S. corporations with non-U.S. owners.
D)  All of the above.
E)  None of the above.F) A) and B)
G) A) and C)

Question 2

The model law relating to the assignment of income among the states for corporations is:

Accepted Answer

A)  Public Law 86-272.
B)  The Multistate Tax Treaty.
C)  The Multistate Tax Commission (MT
C)  .
D)  The Uniform Division of Income for Tax Purposes Act (UDITP
A)  .E) A) and B)
F) A) and C)

Question 3

A U.S. taxpayer may take a current FTC equal to the greater of the FTC limit or the actual foreign taxes (direct or indirect) paid or accrued.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  Concerning the foreign tax credit, most U.S. persons benefit from earning low-tax foreign-source income.
B)  Foreign persons generally benefit from avoiding U.S.-source income classification.
C)  U.S. persons are not concerned with source of income because all their income is subject to U.S. tax under a worldwide system.
D)  Foreign persons may be subject to tax on U.S.-source income without regard to their actual presence in the United States.E) C) and D)
F) None of the above

Question 5

Which of the following foreign taxes paid by a U.S. corporation may be eligible for the foreign tax credit?

Accepted Answer

A)  Real property taxes.
B)  Value added taxes.
C)  Sales taxes.
D)  Dividend withholding taxes.E) A) and B)
F) None of the above

Question 6

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 foreign tax credit related to the Starke dividend?

Accepted Answer

A)  $22,500
B)  $56,250
C)  $150,000
D)  $750,000E) B) and C)
F) A) and D)

Question 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

The following persons own Schlecht Corporation, a foreign corporation.
​

None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

Accepted Answer

A)  Schlecht is not a CFC.
B)  Chee includes $90,000 in gross income.
C)  Marina is not a U.S. shareholder for purposes of determining whether Schlecht is a CFC.
D)  Marina includes $24,000 in gross income.E) A) and B)
F) B) and C)

Exam 16: Multijurisdictional Taxation

The model law relating to the assignment of income among the states for corporations is:

Correct Answer
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A U.S. taxpayer may take a current FTC equal to the greater of the FTC limit or the actual foreign taxes (direct or indirect) paid or accrued.

Correct Answer
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Correct Answer
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Section 482 is used by the Treasury to:

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

Correct Answer
verified

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 foreign tax credit related to the Starke dividend?

Correct Answer
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Which of the following foreign taxes paid by a U.S. corporation may be eligible for the foreign tax credit?

Correct Answer
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The following persons own Schlecht Corporation, a foreign corporation. None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

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

Correct Answer
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Exam 16: Multijurisdictional Taxation

The model law relating to the assignment of income among the states for corporations is:

Correct AnswerverifiedShow Answer

A U.S. taxpayer may take a current FTC equal to the greater of the FTC limit or the actual foreign taxes (direct or indirect) paid or accrued.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Section 482 is used by the Treasury to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 foreign tax credit related to the Starke dividend?

Correct AnswerverifiedShow Answer

Which of the following foreign taxes paid by a U.S. corporation may be eligible for the foreign tax credit?

Correct AnswerverifiedShow Answer

The following persons own Schlecht Corporation, a foreign corporation. ​ None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The following persons own Schlecht Corporation, a foreign corporation. None of the shareholders are related. Subpart F income for the tax year is $300,000. No distributions are made. Which of the following statements is correct?

Correct Answer
verified

Correct Answer
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