M6 International Tax Issues Flashcards
MCQ-08773
Which of the following is not a category of income for foreign tax credit limitation purposes?
Foreign-derived intangible income
Foreign-derived intangible income is not a category of income for foreign tax credit limitation purposes. The categories of income for foreign tax credit limitation purposes are general category income, passive category income, foreign branch income, and global intangible low-taxed income.
MCQ-08766
Alpert Corp. (a U.S. corporation) manufactures dental equipment in Arizona. It makes sales of dental equipment during the year to the following customers:
I. Rupert Corp. (a foreign corporation) for use in its dental centers in Texas
II. Janis Corp. (a foreign corporation) for use in its dental centers in Canada
III. Rogers Corp. (a foreign corporation and related party) for use in its dental centers in Mexico
IV. Commodore Corp. (a U.S. corporation) for use in its dental centers in Canada
Which transactions increase Alpert Corp.’s foreign-derived intangible income?
II only
Sales to non-U.S. persons of property for use outside the U.S. increase a corporation’s foreign-derived intangible income.
MCQ-08775
Which of the following income is eligible for a 100 percent dividends-received deduction?
Dividends paid by a foreign corporation to a 10 percent or more U.S. corporate shareholder
A 100 percent dividends-received deduction for foreign source dividends is available only to corporate shareholders who own at least 10 percent of the foreign corporation
MCQ-08767
Which of the following payments to a foreign person is not subject to U.S. withholding tax requirements?
A customer payment for the sale of inventory within the U.S.
A customer payment for the sale of inventory within the U.S. is business income, which is taxed on a net basis and is not subject to withholding.
MCQ-08774
A shareholder of a controlled foreign corporation is considered a U.S. shareholder if:
The shareholder is a U.S. person who owns at least 10 percent of the stock value or voting stock.
A U.S. shareholder of a controlled foreign corporation is a U.S. person who owns at least 10 percent of the stock value or voting stock.
MCQ-08776
On April 30, Year 2, Daisy Corporation (a controlled foreign corporation, or CFC) purchases $750,000 of common stock in Richie Corporation (a U.S. corporation). Prior to this purchase, Daisy Corporation’s U.S. property investments total $1,200,000. What is Daisy Corporation’s increase in earnings invested in U.S. property for Year 2?
$562,500
To calculate the increase in earnings invested in U.S. property, the average adjusted basis of the CFC’s U.S. property for the tax year (calculated at the close of each quarter) is compared with the adjusted basis at the end of the preceding tax year: [($1,200,000 + $1,950,000 + $1,950,000 + $1,950,000) / 4] less $1,200,000 = $562,500.
MCQ-08778
The base erosion and anti-abuse tax (BEAT) may apply to corporations:
With average annual gross receipts of $500 million or more for the three preceding tax years.
The base erosion and anti-abuse tax (BEAT) may apply to corporations with average annual gross receipts of $500 million or more for the three preceding tax years.
MCQ-08777
A foreign person must file Form 1120-F U.S. Income Tax Return of a Foreign Corporation to report:
Income earned by a U.S. branch.
Income earned by a U.S. branch is reported on Form 1120-F U.S. Income Tax Return of a Foreign Corporation
MCQ-08779
In which of the following situations will a foreign person not be treated as a U.S. resident?
A foreign person who is present in the U.S. for 30 days during the current year and 350 days in each of the two preceding tax years
A foreign person will not meet the substantial presence test if they are not present in the U.S. for at least 31 days during the current year and at least 183 days for a three-year period. A foreign person who fails to meet the substantial presence test and does not hold a permanent resident visa (“green card”) will not be treated as a U.S. resident.
