Determine the correct tax treatment of the following dividends 8. Dividend income received by a resident foreign corporation from adomestic corporation.9. Dividend income received by a nonresident foreign corporation from adomestic corporation (assume there is tax sparing).10. Dividend income received by a nonresident foreign corporation from adomestic corporation (assume there is no tax sparing).

The term "dividend income" refers to the sums that businesses pay to their shareholders as a portion…

Answered: Determine the correct tax treatment of…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 7BCRQ

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8. This dividend is subject to normal income tax a. Dividend received by a domestic corporation from another domestic corporation. b. Dividend received by a resident foreign corporation from a domestic corporation. 'C: Dividend received-by a domestic corporation from a resident foreign corporation: d. Dividend received by resident citizen from a domestic corporation. CS Scanned with CamScanner
1.) Which of the following is tax exempt for a domestic corporation? a. business income derived from abroad b. dividend from a domestic corporation c. monetary benefit from deposit substitute 2.) Which of the following types of income is/are not returnable a. Professional Income b. Business Income c. Compensation Income d. Capital Gains
Which, if any, of the following transactions incurred by an S corporation is not a separately stated item? A Tax-exempt income. B Foreign tax credit. C AMT adjustments and tax preference items. D Amortization of organizational expenditures. E Domestic production activities deduction (DPAD).
1. Gain on sale of shares of domestic corporation directly sold to a buyer is subject to what kind of tax? * a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices 2. Gain on sale of an unlisted shares from a non-listed Domestic Corporation is subject to what kind of tax? a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices 3. Gain on sale of shares of a closely-held corporation is subject to what kind of tax? a. Basic Income Tax (BIT) b. Capital Gains Tax (CGT) c. 8% Preferential Tax d. Real Property Tax (Local Tax) e. None of the abovementioned choices
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.
With respect to the gross up and tax credit procedures applicable to dividends from taxable Canadian corporations, which of the following statements is NOT correct? 1. The gross up is intended to adjust the taxable amount of the dividend to the pre-tax amount that was required at the corporate level in order to pay the dividend. 2. The federal dividend tax credit is the same regardless of corporation it is received from. 3.The amount of the gross up depends on whether the dividend is eligible or non-eligible. 4. The dividend tax credit is intended to compensate the shareholder for the taxes that were paid at the corporate level
Which of the following statements is true regarding the calculation of a C corporation's taxable income and tax liability? A. Business bad debts are allowed as an ordinary business deduction if the direct write-off method is used. B. Charitable contributions are considered a special deduction rather than part of ordinary business deductions. C. The foreign tax credit is applied to taxable income before multiplying by the tax rate to determine gross tax liability. D. The dividends received deduction is used to determine income before NOL and special deductions. 2. As the result of an IRS audit of a C corporation and its sole shareholder, the IRS agent proposes that a portion of the shareholder's salary is unreasonable. Because the corporation has significant earnings and profits, the agent has determined that the unreasonable portion of the salary is a dividend. Which of the following is correct regarding the impact of the proposed adjustment to both the…
Dividends received by a domestic corporation from shares in another domestic corporation are exempt from income tax. Group of answer choices True False
True or False 2. Dividend received from a domestic corporation by a non resident foreign corporation shall be subject to 15% final tax subject to the concition that the country where the nonresident foreign corporation is domiciled allows a credit for taxes deemed paid in the Philippines equivalent to 15%.
What is the difference in the tax treatment of interest anddividends paid by a corporation? Does this factor favor debt orequity financing?
Which of the following statements are correct? i. A tax resident is normally liable to tax on their worldwide, profits, income, and gains, whether received. ii. Non-residents are generally liable to tax on certain income and profits generated from sources within the country. iii. A domiciled taxpayer is normally liable to tax on their worldwide, profits, income, and gains, whether received. iv. Tax is imposed on certain sources of income, such as interest, dividends, royalties, and fees, by way of withholding tax. a. i, ii and iv b. i only c. All of the above d. i, iii and iv
Dividend income received by a domestic corporation from a nonresident foreign corporation may be exempt from income tax, provided: The dividends actually received or remitted into the Philippines are reinvested in the business operations of the domestic corporation within the next taxable year from the time the foreign-source dividends were received or remitted; The dividends received shall only be used to fund the working capital requirements, capital expenditures, dividend payments, investment in domestic subsidiaries, and infrastructure project; and a. b. C. d. The domestic corporation holds directly at least twenty percent (20%) in value of the outstanding shares of the foreign corporation and has held the shareholdings uninterruptedly for a minimum of two (2) years at the time of the dividends distribution. In case the foreign corporation has been in existence for less than two (2) years at the time of dividends distribution, then the domestic corporation must have continuously…

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