LO.3, 5 BlueCo, a domestic corporation, incorporates GreenCo, a new wholly owned entity, in Germany.Under both German and U.S. legal principles, this entity is a corporation. BlueCo faces a 21% U.S. tax rate.GreenCo earns $1,500,000 in net profits from its German manufacturing activities and makes no dividenddistributions to BlueCo. How much U.S. income tax must BlueCo pay for the current year as a result ofGreenCo's earnings, assuming that it triggers no constructive dividend under Subpart F?

Since GreenCo is a wholly-owned foreign subsidiary of BlueCo, because no constructive dividend is…

Answered: LO.3, 5 BlueCo, a domestic corporation,…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter25: Taxation Of International Transact Ions

Section: Chapter Questions

Problem 16P

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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.
P Corporation is the U.S.-based parent of F Company, a French-based branch. If P Corporation has U.S. taxable income of $100,000 and F Company has a $20,000 loss, what is P Corporation’s worldwide taxable income?
Subject:
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
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
None
Axtell Corporation has the following taxable income: U.S. source income $ 1,620,000 Foreign source income: Country A 550,000 Country B 2,000,000 Country C 2,900,000 Taxable income $ 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.
Please guide to helping solve D, and E. thank you!
Tenco. a U.S. corporation. manutactures tennis rackets tor sale in the United States and abroad. Tenco owns 100% of the stock of Teny. a foreign sales subsidiary that was organized in Year 1. During Year 1. Ten had $15 million of foreign base company sales income, paid $1 million in foreign income taxes and distributed no dividends During Year 2, Teny had no earnings and profits, paid no foreign income taxes and distributed a $14 million dividend. Assuming the U.S. cornorate tax rate is 21%. what are the U.S. tax consequences of Teny's Year1 and Year 2 activities?
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
800002. Need help with B
Valley View Inc., a U.S. corporation, formed a wholly owned Mexican corporation to conduct manufacturing and selling operations in Mexico. In its first year of operations, the Mexican corporation reported taxable income of Mex$5,000,000 and paid Mexican income tax of Mex$1,500,000 on its taxable income. In the second year of its operations, the Mexican subsidiary pays a dividend of Mex$2.000,000 to Valley View, Inc. The dividend is subject to a 10 percent withholding tax (Mex$200,000) under the U.S.-Mexico treaty. Assume the currency translation rate for both years is Mex$1:US$0.05.b-1. How much of the dividend from the Mexican subsidiary is subject to U.S. taxation?b-2. Are any of the Mexican taxes imposed on the income distributed creditable to the U.S.?

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