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

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.

What is a corporate inversion and why was this provision enacted?

Discuss the advantages of conducting overseas business activities through a foreign corporation.

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

Explain the alternatives available to individual taxpayers for reporting foreign income taxes that have been paid or accrued.

U.S. citizen Patrick is a bona fide resident of a foreign country for all of the current year. Patrick uses a calendar year as his tax year. He has $100,000 of self- employment income and incurs $20,000 in housing expenses. The base housing cost amount is $16,624. The deduction for housing expenses is