29 Jun Question The United States generally taxes
Question
The United States generally taxes U.S. source fixed and determinable, annual or periodic income earned by non-U.S. persons by applying a withholding tax to the gross amount of income.
True
False
Philippe is a French citizen. During 2012 he spent 150 days in the United States on business. Because Philippe does not spend 183 days in the United States in 2012, he will not be treated as a resident alien for U.S. tax purposes.
True
False
U.S. individuals and corporations are eligible for a deemed-paid credit on dividends received from foreign corporations.
True
False
Subpart F income earned by a CFC will always be treated as a deemed dividend to the CFC’s U.S. shareholders in the year the subpart F income is earned.
True
False
Ames Corporation has a precredit U.S. tax of $340,000 on $1,000,000 of taxable income in 2012. Ames has $600,000 of foreign source taxable income and paid $120,000 of income taxes to the Australian government on this income. All of the foreign source income is treated as general category income for foreign tax credit purposes. Ames’s foreign tax credit on its 2012 tax return will be:
$72,000
$120,000
$204,000
$340,000
Orono Corporation manufactured inventory in the United States and sold the inventory to customers in Canada. Gross profit from the sale of the inventory was $300,000. Title to the inventory passed FOB: destination. How much of the gross profit is treated as foreign source income for purposes of computing the corporation’s foreign tax credit in the current year?
$300,000.
$150,000.
$0.
The answer cannot be determined with the information provided.
Which of the following expenses incurred by a U.S. corporation is not subject to special apportionment rules for foreign tax credit purposes?
Interest
Research and experimental
Advertising
State and local income taxes
U.S. corporation reports its foreign tax credit computation on which tax form?
Form 1116
Form 1118
Form 1120
Form 8832
Which of the following tax or non-tax benefits does not arise when a U.S. corporation forms a hybrid entity in Germany through which to earn business profits in Germany and elects to have the entity treated as a branch for U.S. tax purposes?
Potential deferral of U.S. tax on income earned by the corporation
Flow-through of losses from the German corporation to the tax return of the U.S. corporation
Limited liability to the U.S. corporation for acts committed by the hybrid entity
Free transferability of the stock of the hybrid entity by the U.S. corporation
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?
Form 1118
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