FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: The U.S. Taxation of Multinational Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Essay

Review LaterAdd Note

Review Later

Janet Mothra, a U.S. citizen, is employed by Caterpillar Corporation, a U.S. corporation. In May 2018, Caterpillar relocated Janet to its operations in Spain for the remainder of 2018. Janet was paid a salary of $200,000. As part of her compensation package for moving to Spain, Janet received a housing allowance of $40,000. Janet's salary was earned ratably over the twelve-month period. During 2018 Janet worked 280 days, 168 of which were in Spain and 112 of which were in the United States. How much of Janet's total compensation is treated as foreign source income for 2018?

Correct Answer

verified

$160,000
Janet apportions 60% (168/280) ...

View Answer

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Which statement best describes the U.S. framework for determining if an individual who is not a U.S. citizen will be treated as a resident alien for U.S. tax purposes?

A) A person must have a green card and meet a substantial presence test to be treated as a resident alien for U.S. tax purposes.
B) A person must have a green card to be treated as a resident alien for U.S. tax purposes.
C) A person must meet a substantial presence test to be treated as a resident alien for U.S. tax purposes.
D) A person with a green card will always be treated as a resident alien for U.S. tax purposes, while a person without a green card may be treated as a resident alien if she meets a substantial presence test.

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 43

Essay

Review LaterAdd Note

Reno Corporation, a U.S. corporation, reported total taxable income of $6,000,000 in 2018. Taxable income included $1,800,000 of foreign source taxable income from the company's branch operations in Canada. All of the branch income is foreign branch income. Reno paid Canadian income taxes of $450,000 on its branch income. Compute Reno's net U.S. tax liability and any foreign tax credit carryover for 2018. Assume an exchange rate of C$1 = $1.

Spartan Corporation, a U.S. company, manufactures widgets for sale in the United States and Europe. All manufacturing activities take place in the United States. During the current year, Spartan sold 100,000 widgets to European customers at a price of $5 each. Each widget costs $2 to produce. All of Spartan's production assets are located in the United States. For each independent scenario, determine the source of the gross profit from sale of the widgets. A. Spartan ships its widgets F.O.B., place of destination. B. Spartan ships its widgets F.O.B., place of shipment.

Philippe is a French citizen. During 2018 he spent 150 days in the United States on business. Because Philippe does not spend 183 days in the United States in 2018, he will not under any circumstances be treated as a resident alien for U.S. tax purposes.

Manchester Corporation, a U.S. corporation, incurred $100,000 of interest expense during 2018. Manchester manufactures inventory that is sold within the United States and abroad. The total tax book value of its U.S. production assets is $20,000,000. The total tax book value of its foreign production assets is $5,000,000. What amount of interest expense is apportioned to the company's foreign source income for foreign tax credit purposes, assuming this is the first year the company makes this computation and the interest expense is fully deductible in 2018?

What form is used by a U.S. corporation to "check-the-box" to elect the U.S. tax consequences of forming a hybrid entity outside the United States?

Which statement best describes the U.S. framework for taxing multinational transactions?

Which of the following exceptions could cause subpart F income to be excluded from the deemed dividend regime?

Absent a treaty provision, what is the statutory withholding tax rate imposed by the United States on a dividend paid by a U.S. corporation to a resident of Denmark?

Alex, a U.S. citizen, became a resident of Belgium in 2018. Alex will no longer be subject to U.S. taxation on income he earns in Belgium if such income is exempted from tax under the U.S. - Belgium treaty.

A U.S. corporation reports its foreign tax credit computation on which tax form?

Which of the following items of foreign source income is classified as passive category income for foreign tax credit purposes?

Deductible interest expense incurred by a U.S. corporation will always be treated as a U.S. source deduction.

To be eligible for the "closer connection" exception to the physical presence test, an individual must be in the United States for less than how many days?

Which of the following foreign taxes are not creditable for U.S. tax purposes?

Under the book value method of allocating and apportioning interest expense for FTC purposes, assets are characterized as being either U.S. or non-U.S. based on their geographic location.

Which of the following foreign taxes is not a creditable foreign tax for U.S. tax purposes?

Alhambra Corporation, a U.S. corporation, receives a dividend from its 100 percent owned Spanish subsidiary. Any income taxes paid to a Spanish taxing authority will be creditable on the U.S. tax return.

A rectangle with an inverted triangle within it is a symbol used to represent what organizational form?