911. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS Question TF #36 A domestic corporation is one.

911. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #36
A domestic corporation is one whose
assets are primarily (> 50%) located in the U.S.

a.
True
b. False

912. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #37
If a foreign corporation’s U.S. effectively connected earnings for the taxable
year are $900,000 and its net equity has increased by $40,000, its dividend
equivalent amount is $940,000.

a.
True
b. False

913. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #38
Gains on the sale of U.S. real property held directly or indirectly through
U.S. stock ownership by NRAs and foreign corporations are subject to taxation
under FIRPTA.

a.
True
b. False

914. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #39
Disposition of stock of a domestic corporation that is a real property holding
corporation is subject to tax under FIRPTA.

a.
True
b. False

915. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #40
The purpose of the transfer pricing rules is to ensure that taxpayers have
ultimate flexibility in shifting profits between related entities.

a.
True
b. False

916. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #41
An appropriate transfer price is one that considers the risks, assets, and
functions of the persons to whom income is assigned.

a.
True
b. False

917. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #42
The U.S. system for taxing income earned outside its borders by U.S. persons is
referred to as the territorialapproach
because only income earned within the U.S. border is subject to taxation.

a.
True
b. False

918. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question TF #43
The U.S. system for taxing income earned inside its borders by non-U.S. persons
is referred to as inbound taxation
because such foreign persons are earning income by coming into the United
States.

a.
True
b. False

919. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question MC #1
GreenCo, a domestic corporation, earns $25 million of taxable income from U.S.
sources and $5 million of taxable income from foreign sources. What amount of
taxable income does GreenCo report on its U.S. tax return?

a.
$30 million.
b. $25 million.
c. $30 million less any tax paid on U.S.
income.
d. $25 million less any tax paid on the
foreign income.

920. CHAPTER 9?TAXATION OF INTERNATIONAL TRANSACTIONS
Question MC #2
Without the foreign tax credit, double taxation would result when:

a.
The United States taxes the U.S.-source income of a U.S. resident.
b. The United States and a foreign
country both tax the foreign-source income of a U.S. resident.
c. A foreign country taxes the
foreign-source income of a nonresident alien.
d. Only the United States taxes the
foreign-source income of a U.S. resident (e.g., a treaty prevents foreign
taxation).

 

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