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

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

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

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?

Which of the following foreign taxes are not creditable 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.

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.

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.

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

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

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

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

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.

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?

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?

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

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.