Question 1

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

Accepted Answer

A) True 
 B)False

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

Zeta Corporation,incorporated in Country Z,is 100% owned by Zelda Corporation,a U.S.corporation.Zelda purchases some machines from an unrelated corporation,for use in Country A.The portion of the sales contract covering installation and maintenance of the machines is assigned by Zelda to Zeta.Zeta is to be paid for these services by Zelda.Does this qualify as foreign base company services income?

Accepted Answer

Yes,because it is performed fo

Question 4

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Accepted Answer

Yes,the foreign corporation is

Question 5

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Accepted Answer

A corporation having excess foreign taxe

Question 6

In January of the current year,Stan Signowski's U.S.employer assigned him to their Paris office.This year,he earned salary,a cost-of-living allowance,a housing allowance,a home leave allowance that permits him to return home once each year,and an education allowance to pay for U.S.schooling for his son.Stan and his wife,Jennifer,have rented an apartment in Paris and paid French income taxes.What tax issues does Stan need to consider when preparing his tax return?

Accepted Answer

• Is Stan Signowski eligible to claim th

Question 7

Identify which of the following statements is true.

Accepted Answer

A) An individual who is physically present in a foreign country for 330 full days out of a 12-month period can claim the foreign-earned income exclusion only for the days in the 12-month period he/she is physically present in a foreign country. 
B) An individual,who is a bona fide resident of a foreign country for at least one full tax year,can claim the foreign-earned income exclusion for all days on which he/she is a resident of the foreign country and physically present in that country. 
C) Fringe benefits that are excluded from gross income under a Code Section other than Sec.911 reduce the annual dollar ceiling for the foreign income exclusion. 
D) All of the above are false. 
A) An individual who is physically present in a foreign country for 330 full days out of a 12-month period can claim the foreign-earned income exclusion only for the days in the 12-month period he/she is physically present in a foreign country. 
B) An individual,who is a bona fide resident of a foreign country for at least one full tax year,can claim the foreign-earned income exclusion for all days on which he/she is a resident of the foreign country and physically present in that country. 
C) Fringe benefits that are excluded from gross income under a Code Section other than Sec.911 reduce the annual dollar ceiling for the foreign income exclusion. 
D) All of the above are false.

Question 8

Identify which of the following statements is true.

Accepted Answer

A) Foreign taxes paid in excess of the foreign tax credit limitation can be carried back to the previous three tax years and then carried over to the succeeding five tax years. 
B) When a taxpayer reports excess foreign tax credits in more than one year,the excess credits are used in a last-in-first-out (LIFO)manner. 
C) When computing the foreign tax credit limitation,taxable income for individual taxpayers is computed without a personal exemption deduction. 
D) All of the above are false. 
A) Foreign taxes paid in excess of the foreign tax credit limitation can be carried back to the previous three tax years and then carried over to the succeeding five tax years. 
B) When a taxpayer reports excess foreign tax credits in more than one year,the excess credits are used in a last-in-first-out (LIFO)manner. 
C) When computing the foreign tax credit limitation,taxable income for individual taxpayers is computed without a personal exemption deduction. 
D) All of the above are false.

Question 9

Quality Corporation created a foreign subsidiary in Country C this year.The subsidiary receives components from Quality,assembles the components into a finished product using local labor,and sells them to unrelated wholesalers in Countries A,B,and C using its own sales force.The foreign subsidiary has paid no dividends to the parent this year.What tax issues should Quality's Director of Taxes consider with respect to these activities?

Accepted Answer

• Is the Country C corporation a control

Question 10

U.S.citizens and resident aliens working abroad may qualify for the foreign-earned income exclusion of $97,600 in 2013.

Accepted Answer

A) True 
 B)False

Question 11

Identify which of the following statements is true.

Accepted Answer

A) The losses of a foreign corporation that is 100% owned by a domestic corporation can be deducted by the domestic corporation to offset its gross income in the year incurred. 
B) The deemed paid foreign tax credit was enacted so as not to discourage foreign direct investment through foreign branches. 
C) A dividend remittance made by a noncontrolled foreign corporation is translated into U.S.dollars at the current exchange rate for the date the dividend is paid. 
D) All of the above are false. 
A) The losses of a foreign corporation that is 100% owned by a domestic corporation can be deducted by the domestic corporation to offset its gross income in the year incurred. 
B) The deemed paid foreign tax credit was enacted so as not to discourage foreign direct investment through foreign branches. 
C) A dividend remittance made by a noncontrolled foreign corporation is translated into U.S.dollars at the current exchange rate for the date the dividend is paid. 
D) All of the above are false.

Question 12

For the foreign credit limitation calculation,income derived from the sale of inventory which is produced by the seller,is considered earned

Accepted Answer

A) where production occurs. 
B) where the sale occurs. 
C) where the seller is a resident. 
D) partially where produced and partially where sold. 
A) where production occurs. 
B) where the sale occurs. 
C) where the seller is a resident. 
D) partially where produced and partially where sold.

Question 13

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 2010;365 days in 2011;and 60 days this year,2012.The maximum earned income exclusion for this year is?

Accepted Answer

A) $13,733 
B) $16,044 
C) $13,151 
D) none of the above 
A) $13,733 
B) $16,044 
C) $13,151 
D) none of the above

Question 14

Guinness Corporation,a U.S.corporation,began operating overseas in the current year.This year,Guinness sold machine tools that it manufactured in the United States to Canadian companies from a branch office located in Toronto,purchased a 40% investment in a Brazilian corporation from which it received a dividend,and received royalties from an English firm that is the licensee of machine tool patents held by Guinness.The English firm uses the patents to manufacturer machine tools it sells in England.What international tax issues should Guinness's Director of Taxes consider with respect to these activities?

Accepted Answer

• Does Guinness Corporation have to reco

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

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.

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Identify which of the following statements is true.

Identify which of the following statements is true.

U.S.citizens and resident aliens working abroad may qualify for the foreign-earned income exclusion of $97,600 in 2013.

Identify which of the following statements is true.

For the foreign credit limitation calculation,income derived from the sale of inventory which is produced by the seller,is considered earned

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 2010;365 days in 2011;and 60 days this year,2012.The maximum earned income exclusion for this year is?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters

Exam 16: Ustaxation of Foreign-Related Transactions

If foreign taxes on foreign income exceed U.S.taxes on foreign income,the excess foreign taxes are credited against U.S.taxes in the current year.

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.

A foreign corporation with a single class of stock is owned equally by Jericho Corporation,a U.S.corporation,and Joshua,a U.S.citizen.Joshua owns no Alpha Corporation stock.Is the foreign corporation a controlled foreign corporation (CFC)?

Describe the financial statement implications of the foreign tax credit and a foreign subsidiary.

Identify which of the following statements is true.

Identify which of the following statements is true.

U.S.citizens and resident aliens working abroad may qualify for the foreign-earned income exclusion of $97,600 in 2013.

Identify which of the following statements is true.

For the foreign credit limitation calculation,income derived from the sale of inventory which is produced by the seller,is considered earned

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 2010;365 days in 2011;and 60 days this year,2012.The maximum earned income exclusion for this year is?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters