Exam 16: U.S. Taxation of Foreign-Related Transactions

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

Identify which of the following statements is false.

Karen,a U.S.citizen,earns $40,000 of taxable income from U.S.sources,$20,000 in taxable wages from Country A and $20,000 in taxable interest from Country B.The U.S.tax rate is 25%.The tax on Country A income is $8,000,and Country B charges no tax on the interest income.Assuming two baskets are needed for the two types of income because the interest is passive income,Karen's foreign tax credit that can be claimed is

Identify which of the following statements is true.

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

Prior to 2018,domestic corporation X owns all the stock of controlled foreign corporation (CFC)T.X's acquisition cost for the CFC investment is $150,000.The CFC reports E&P of $200,000 since the domestic corporation acquired its interest,of which $120,000 was Subpart F income.The CFC makes a cash distribution of $90,000 to the domestic corporation.What is the domestic corporation's basis for its investment in T immediately after the cash distribution?

The physical presence test method of qualifying for the foreign-earned income exclusion requires the

Income derived from the sale of merchandise inventory (i.e.,final goods purchased for resale)are sourced in the country where the sale occurs.

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

U.S.citizens,resident aliens,and domestic corporations are taxed by the U.S.government on their worldwide income at regular U.S.tax rates.

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

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?

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.

Which of the following statements is incorrect?

Identify which of the following statements is true.

What are the consequences of classification as a corporate inversion?

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

Identify which of the following statements is true.

Identify which of the following statements is true.

Perry,a U.S.citizen,is transferred by his employer to Japan for a three-year assignment.Which one of the following items is not excluded under Sec.911?