Question 1

What are the carryback and carryforward periods for the foreign tax credit?

Accepted Answer

A) back two years; forward five years 
B) back three years; forward ten years 
C) back one year; forward ten years 
D) back two years; forward twenty years 
A) back two years; forward five years 
B) back three years; forward ten years 
C) back one year; forward ten years 
D) back two years; forward twenty years

Question 2

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 $3,000 of interest income earned on a bank account in his home country and $1,800 of interest income earned on a bank account located in Addison, Illinois. How will the interest be taxed and how will the tax be collected?

Accepted Answer

The United States do

Question 3

Identify which of the following statements is false.

Accepted Answer

A) A nonresident alien can elect to have income earned on a passive real estate investment treated as trade or business income. 
B) Nonresident aliens may use either the standard deduction or claim itemized deductions. 
C) Nonresident aliens are generally allowed to claim only a single personal exemption. 
D) All of the above are false. 
A) A nonresident alien can elect to have income earned on a passive real estate investment treated as trade or business income. 
B) Nonresident aliens may use either the standard deduction or claim itemized deductions. 
C) Nonresident aliens are generally allowed to claim only a single personal exemption. 
D) All of the above are false.

Question 4

Identify which of the following statements is false.

Accepted Answer

A) An accrual-basis taxpayer must make an adjustment to their foreign tax credit which reflects the change in exchange rates between the accrual date and the payment date. 
B) Dividend income received by a U.S. individual from a foreign corporation earning nearly all of its income from outside the United States is foreign-source income. 
C) Income from the sale of personal property (other than inventory)by a U.S. resident is considered earned in the country where the personal property is delivered. 
D) Itemized deductions are allocated between U.S. and foreign-source income. 
A) An accrual-basis taxpayer must make an adjustment to their foreign tax credit which reflects the change in exchange rates between the accrual date and the payment date. 
B) Dividend income received by a U.S. individual from a foreign corporation earning nearly all of its income from outside the United States is foreign-source income. 
C) Income from the sale of personal property (other than inventory)by a U.S. resident is considered earned in the country where the personal property is delivered. 
D) Itemized deductions are allocated between U.S. and foreign-source income.

Question 5

A U.S. citizen accrued $120,000 of creditable foreign taxes last year. The citizen's foreign tax credit limitation for last year is $90,000 (only a single limitation need be calculated). The excess foreign tax credit limitation for the year preceding the year in which the excess foreign taxes were incurred is $2,000. A similar $2,000 excess foreign tax credit limitation position is expected in each of the next 10 years. What portion of the excess foreign taxes can be expected to be noncreditable because of the foreign tax credit limitation?

Accepted Answer

A) $0 
B) $2,000 
C) $8,000 
D) none of the above 
A) $0 
B) $2,000 
C) $8,000 
D) none of the above

Question 6

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 f

Question 7

U.S. corporations must provide a summary of their overseas business activities on Form 1120, Schedule N.

Accepted Answer

A) True 
 B)False

Question 8

Identify which of the following statements is true.

Accepted Answer

A) For a foreign corporation to be a controlled foreign corporation (CF
C) , more than 40% of its voting stock, or more than 40% of the value of its outstanding stock, must be owned by U.S. shareholders on any day of the corporation's tax year. 
B) Under the Subpart F rules, controlled foreign corporations (CFCs)are required to distribute a certain portion of their income as dividends to their U.S. shareholders. 
C) When a controlled foreign corporation (CF
C) earns Subpart F income, such income is considered to be a constructive distribution to the CFC's U.S. shareholders on the last day of the CFC's tax year, or the last day on which CFC status is retained. 
D) All of the above are true. 
A) For a foreign corporation to be a controlled foreign corporation (CF
C) , more than 40% of its voting stock, or more than 40% of the value of its outstanding stock, must be owned by U.S. shareholders on any day of the corporation's tax year. 
B) Under the Subpart F rules, controlled foreign corporations (CFCs)are required to distribute a certain portion of their income as dividends to their U.S. shareholders. 
C) When a controlled foreign corporation (CF
C) earns Subpart F income, such income is considered to be a constructive distribution to the CFC's U.S. shareholders on the last day of the CFC's tax year, or the last day on which CFC status is retained. 
D) All of the above are true.

Question 9

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?

Accepted Answer

The $30,000 of non-U.S. sales commission

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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?

Accepted Answer

A) There are three "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
B) There are three "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
C) There are two "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
D) There are two "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
A) There are three "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) . 
B) There are three "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
C) There are two "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CF
C) . 
D) There are two "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CF
C) .

Question 12

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 a $15,000 capital gain on the sale of stock in a U.S. corporation while he was in the United States. The capital gain is not connected to his trade or business. How will the capital gain be taxed and how will the tax be collected?

Accepted Answer

The capital gain is exempt from U.S. tax

Question 13

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

Question 14

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

Accepted Answer

A) last year. 
B) the current year. 
C) next year. 
D) The earned income exclusion cannot be claimed. 
A) last year. 
B) the current year. 
C) next year. 
D) The earned income exclusion cannot be claimed.

Question 15

In 2017, Phoenix Corporation is a controlled foreign corporation (CFC)incorporated in Country X. It is 100% owned by its U.S. parent corporation. Phoenix has $80,000 of taxable income from the sale of widgets that were purchased from their U.S. parent corporation. All widgets are intended for use or consumption within Country X and have the same gross profit. Sixty percent of the widgets were sold through a Country X wholesaler that is 100% owned by Phoenix, and 40% are sold through unrelated Country X wholesalers. What amount of profits will be constructively distributed as foreign-based company sales income to the U.S. parent company?

Accepted Answer

A) $0 
B) $32,000 
C) $48,000 
D) $80,000 
A) $0 
B) $32,000 
C) $48,000 
D) $80,000

Question 16

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) Dividends generally are considered to be earned in the distributing corporation's country of incorporation. 
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) Dividends generally are considered to be earned in the distributing corporation's country of incorporation. 
D) All of the above are false.

Question 17

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 i

Question 18

Identify which of the following statements is true.

Accepted Answer

A) 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. 
B) Nonresident aliens and foreign corporations are not subject to U.S. taxation on their non-U.S. source investment income and part or all of their non-U.S. source trade or business income. 
C) In a particular year, the overall foreign tax credit limitation permits a taxpayer to offset "excess" foreign taxes paid in one country against "excess" limitation amounts originating in other countries. 
D) All of the above are true. 
A) 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. 
B) Nonresident aliens and foreign corporations are not subject to U.S. taxation on their non-U.S. source investment income and part or all of their non-U.S. source trade or business income. 
C) In a particular year, the overall foreign tax credit limitation permits a taxpayer to offset "excess" foreign taxes paid in one country against "excess" limitation amounts originating in other countries. 
D) All of the above are true.

Question 19

U.S. citizens and resident aliens working abroad may qualify for the foreign-earned income exclusion of $107,600 in 2020.

Accepted Answer

A) True 
 B)False

Question 20

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.

What are the carryback and carryforward periods for the foreign tax credit?

Identify which of the following statements is false.

Identify which of the following statements is false.

U.S. corporations must provide a summary of their overseas business activities on Form 1120, Schedule N.

Identify which of the following statements is true.

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

Identify which of the following statements is true.

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)?

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 $107,600 in 2020.

Identify which of the following statements is true.

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: Us Taxation of Foreign-Related Transactions

What are the carryback and carryforward periods for the foreign tax credit?

Identify which of the following statements is false.

Identify which of the following statements is false.

U.S. corporations must provide a summary of their overseas business activities on Form 1120, Schedule N.

Identify which of the following statements is true.

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

Identify which of the following statements is true.

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)?

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 $107,600 in 2020.

Identify which of the following statements is true.

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