Exam 16: Us Taxation of Foreign-Related Transactions

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 2018; 365 days in 2019; and 60 days in 2020. The maximum earned income exclusion for 2020 rounded to the nearest whole number is?

Define the term "nonresident alien" and discuss the special tax consequences of U.S. taxation on various types of income of a nonresident alien.

Jose, a U.S. citizen, has taxable income from U.S. sources of $15,000 and taxable income from a foreign country of $35,000. Assume the U.S. tax rate is 25% and Jose paid $12,000 in taxes to the foreign country. What foreign tax credit can be claimed by Jose?

A foreign corporation is a CFC that is in its initial year of operation. For the current year, it reports $1 million of earnings and has an aggregate U.S. Property investment of $400,000. If none of the earnings qualified as Subpart F income, explain how the earnings are taxed.

A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident alien on the last day of the tax year and both spouses consent.

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.