A U.S. corporation owning 100 percent of a Dutch corporation will be eligible for a foreign tax credit for Dutch withholding taxes imposed on dividends received from the corporation even if the dividend is eligible for the 100 percent dividends received deduction. Group startsTrue or FalseTrue, unselectedFalse, unselected

A U.S. corporation owning 100 percent of a Dutch corporation will be eligible for a foreign tax credit for Dutch withholding taxes imposed on dividends received from the corporation even if the dividend is eligible for the 100 percent dividends received deduction. Group startsTrue or FalseTrue, unselectedFalse, unselected

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 44DQ

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U.S. corporations are eligible for a foreign tax credit for withholding taxes imposed on dividends received from 100 percent owned foreign corporations, even if the dividend qualifies for the 100 percent dividends received deduction. True or False
Which of the following items of foreign source income is classified as passive category income for foreign tax credit purposes? Multiple Choice Dividend received from a 5 percent owned foreign corporation, all of the income of which is derived from an active business. Dividend received from a 20 percent owned foreign corporation, all of the income of which is derived from an active business. Dividend received from a 100 percent owned foreign corporation, all of the income of which is derived from an active business. None of the dividends in the scenarios listed here are classified as passive category income.
In order to simplify the tax code, current regulations require that a dollar of income earned by a U.S. Corporation in the United States is taxed in the same way as a dollar of income earned by a U.S. Corporation in a foreign country. Select one: True False
Which of the following gain is subject to capital gains tax? * a. Gain on sale of domestic bonds considered as capital asset. b. Gain on sale of real property considered as capital asset which is located in the Philippines. c. Gain on sale of foreign stocks not traded through the stock exchange O d. All of the above 9 O e. Both a and b only
2. Liang Corporation, a U.S. entity, owns 100% of ForCo, a non-U.S. corporation not engaged in a U.S. trade or business. Is Liang subject to any U.S. income tax on her dealings with ForCo? Explain.
U.S. International Corporation (USIC), a U.S. taxpayer, has investments in Foreign Entities A-G. Relevant Information for these entities for the current fiscal year appears in the following table: Entity Country % Owned Activity Income before tax ($ millions) Income Tax Rate Dividend Withholding tax Rate Net Amount Received by Parent ($ millions) USIC United States 35.00% Argentina Brazil Canada Hong Kong 100% Liechtenstein 100% A B C D E F G 100% 100% 100% 51% Japan New Zealand 60% Manufacturing $10.00 Manufacturing $1.00 Manufacturing $2.00 Manufacturing $3.00 Investment $2.00 Distribution $3.00 Manufacturing $2.00 $4.00 Banking 35.00% 34.00% 26.00% 16.50% 10.00% 38.00% 28.00% 0% 0% 5% 0% 4% 5% 5% $0.20 $2.50 $1.00 $1.50 S- $0.50 $1.00 Additional Information 1. USIC's $10 million income before tax is derived from the production and sale of products in the United States. 2. Each entity is legally incorporated in its host country other than Entity A, which is registered with the…
8. Imposed on dividend, interest, and royalty payments to foreign investors. This is: a. Border tax b. Transfer tax c. Withholding tax d. Value-added tax.
San Carlos Corporation, a U.S. multinational, had pretax U.S. source income and foreign source income as follows: U.S. source income $ 400,000 Foreign source income—Country W 300,000 Total $ 700,000 San Carlos paid $60,000 income tax to Country W. Assume San Carlos’ foreign source income does not qualify as foreign-derived intangible income. Calculate San Carlos' tax savings if it takes a foreign tax credit rather than deducting this tax. $100,000 $66,000 $47,400 $0
San Carlos Corporation, a U.S. multinational, had pretax U.S. source income and foreign source income as follows: U.S. source income $ 400,000 300,000 Foreign source income-Country W Total $ 700,000 San Carlos paid $60,000 income tax to Country W. Assume San Carlos' foreign source income does not qualify as foreign-derived intangible income. Calculate San Carlos' tax savings if it takes a foreign tax credit rather than deducting this tax.
Which of the following statements with respect to capital gains is correct? Select one: O A The favourable taxation of capital gains is designed to partially compensate businesses for the effects of inflation. O B. The lifetime capital gains deduction is no longer available to Canadian individuals. OC. The inclusion rate for taxable capital gains has always been one-half of the capital gain. O D. All gains on the sale of Canadian securities are treated as capital gains.
Which of the following statements in relation to the taxation treatment of unfranked distributions from Australian shares is most correct? A.Unfranked dividends are taxed as normal income and no imputation credits apply B.Unfranked dividends have tax paid at the company rate prior to their distribution to individual shareholders C.Unfranked dividends are tax-free to the investor D.The taxpayer receives the value of franking credits whether they receive the dividends as cash or as extra shares through a dividend re-investment p
Axtell Corporation has the following taxable income: U.S. source income Foreign source income: Country A Country B Country C Taxable income $ 1,620,000 550,000 2,000,000 2,900,000 $ 7,070,000 Axtell paid $600,000 income tax to Country B and $1.3 million income tax to Country C. Country A does not have a corporate income tax. Required: Compute Axtell's U.S. income tax, assuming the foreign source income does not qualify as FDII. Note: Do not round any intermediate calculations. Enter your answer in dollars and not in millions of dollars. U.S. income tax