Exam 16: Us Taxation of Foreign-Related Transactions

Excess foreign taxes in one basket cannot offset limitation amounts in another basket.

Discuss the use of a "tax haven" nation to reduce taxes and the effect of Subpart F rules on such planning.

What are the five major income categories that are taxed under the Subpart F rules? Explain the concept of Subpart F income.

Music Corporation is a CFC incorporated in Country M. Music receives interest and dividends from its two foreign subsidiary corporations, Sharp Corporation and Flat Corporation. Sharp is incorporated in Country S and conducts all of its activities in that country. Flat is incorporated in Country M and conducts all of its activities in that country. Are the interest and dividends received by Music Corporation FPHCI?

Compare the U.S. tax treatment of a nonresident alien and a resident alien, both of whom earn U.S. trade or business and U.S. investment income.

A nonresident alien earns $10,000 of dividends from a domestic corporation, which is the alien's only U.S. source income. Which one of the following statements is incorrect?

A foreign corporation with a single class of stock is owned 8% by Bert, 49% by Xi Yong, 30% by Ernie, and 13% by Mark. Bert, Ernie, and Mark are U.S. citizens, and Xi Yong is a nonresident alien. Bert is Ernie's son. Is the foreign corporation a controlled foreign corporation (CFC)?

Marcella, an alien individual, is present in the United States for 122 days this year and 122 days each in the past two years. Does she satisfy both the 31-day and 183-day requirements for U.S. Residency status?

U.S. shareholders are not taxed on dividends paid by a foreign subsidiary as long as the earnings are not remitted to them as dividends.

What are the consequences of classification as a corporate inversion?

A taxpayer who is physically present in a foreign country for 330 full days out of a 12-month period and maintains a tax home there has satisfied the bona fide foreign resident test.

A U.S. citizen, who uses a calendar year as his tax year, is transferred to a foreign country by his employer. The U.S. citizen arrived in the foreign country on November 3 of last year. Residency is expected to be maintained in the foreign country until August 4 of next year. None of the years are a leap year. The first year for which an earned income exclusion can be claimed is

Jacque, a single nonresident alien, is in the United States for 80 days in the current year engaging in the conduct of a U.S. trade or business. Jacque has $75,000 of sales income earned while in the United States and $30,000 of non-U.S. sales income earned while he was outside the United States. How will the income be taxed and how will the tax be collected?

Identify which of the following statements is true.

A taxpayer may make the election to either deduct or take a credit for foreign income taxes

U.S. citizen who has a calendar tax year establishes a tax home and residence in a foreign country and qualifies for the foreign-earned income exclusion for 60 days in 2017; 365 days in 2018; and 60 days in 20189 The maximum earned income exclusion for 2019 rounded to the nearest whole number is?

Income is "effectively connected" with the conduct of a U.S. business only if

Which of the following is an advantage of conducting foreign operations through a branch?

A foreign corporation is owned by five unrelated individuals. John, Sam, and David are U.S. citizens who own 30%, 18% and 9%, respectively, of the foreign corporation's single class of stock. Alberto and Manuel are nonresident aliens who own 37% and 6%, respectively, of the foreign corporation's stock. Which of the following statements is true?

Identify which of the following statements is true.