None Ronan, Inc. is a U.S. corporation and Becker, Inc. is itsforeign subsidiary. In 2017, Ronan earned $400,000 ofU.S. source income. Becker earned $100,000 offoreign income, paid $20,000 of foreign tax, anddistributed $80,000 to Ronan. How much dividendincome will Ronan report related to the distributionfrom Becker?

Step 1: Identify Total Distribution:Becker distributed a total of $80,000 to Ronan.Step 2: Assess…

Answered: Ronan, Inc. is a U.S. corporation and…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 52P

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Hanson Mills, a U.S.-based MNC has a foreign subsidiary that earns $1,050,000 before local taxes, with all the after tax funds available to the parent in the form of dividends. The foreign income tax rate is 30 percent, the foreign dividend withholding tax rate is 15 percent, and the firm's U.S. tax rate is 35 percent. What are the funds available to the parent MNC if foreign taxes can be applied as a credit against the MNC's U.S. tax liability? A) $624,750 B) $425,250 C) $257,250 D) $735,000
The answer is B. Please explain how to get this number. Austin Corporation, a U.S. corporation, received the following investment income during the current year: $50,000 of dividend income from the ownership of stock in a French corporation, $20,000 interest on a loan to its Dutch subsidiary, $40,000 royalty from its 50 percent owned Irish venture, and $30,000 capital gain from the sale of its stock in a Brazilian corporation. How much of Austin's income is treated as a foreign source? A) $140,000B) $110,000C) $70,000D) $60,000
Oracle Corp, a U.S. corporation, earns $25 million of taxable income from U.S. sources and $10 million of taxable income from foreign sources. What amount of taxable income does Oracle report on its U.S. tax return? a. $25 million. b. $35 million. c. $25 million less any tax paid on the foreign income. d. $35 million less any tax paid on U.S. income.
3. Hanson Mills,, a U.S.-based MNC has a foreign subsidiary that earns $1,050,000 before local taxes, with all the after tax funds to be available to the parent in the form of dividends. The foreign income tax rate is 30%, the foreign dividend withholding tax rate is 15% and the firm's U.S. tax rate is 35%. What are the funds available to the parent MNC if no tax credits are allowed? A) $624,752 B) $425,250 C) $406,088 D) $735,000
Elmo, Incorporated is a U.S. corporation with a branch office in foreign country Z. During the current year, Elmo had $392,000 of U.S. source income and $34,500 of foreign source income from Z, on which Elmo paid $16,100 of country Z income tax. Required: a. Calculate Elmo's U.S. tax liability before foreign tax credit, maximum foreign tax credit allowable, and net U.S. tax liability after foreign tax credit. b. If Elmo had paid only $3,795 of country Z income tax, calculate Elmo's foreign tax credit allowable and net U.S. tax liability after foreign tax credit. Complete this question by entering your answers in the tabs below. Required A Required B Calculate Elmo's U.S. tax liability before foreign tax credit, maximum foreign tax credit allowable, and net U.S. tax liability after foreign tax credit. Note: Do not round any intermediate division. U.S. tax liability before foreign tax credit Maximum foreign tax credit allowable Net U.S. tax liability after foreign tax credit Amount $…
Katya Corporation had the following data in 2022: Gross Income, Philippines P 600,000 500,000 300,000 Gross Income, USA Expenses, Philippines Expenses, USA Interest from time deposit 300,000 10,000 21,000 interest on money market placement, net of tax Compute the income tax due and the final taxes payable if Katya is a: 1. Domestic Corporation 2. Resident Foreign Corporation 3. Nonresident Foreign Corporation
a) Explain, in three sentences or less, ‘cross-credit’ in relation to the foreign tax credit. Make sure to identify the problem, and how cross-crediting solves the problem. b) Treadwell, Inc. had $2,500,000 taxable income, $250,000 of which was generated by business activities in foreign jurisdictions. If Treadwell paid $55,500 foreign tax to Utopia. Compute the following: US tax paid______________________ Worldwide tax paid_______________
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.
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ForCo, a foreign corporation, receives interest income of $100,000 from USCO, an unrelated U.S. corporation. USCO historically has earned 85% of its income from foreign sources. What amount of ForCo's interest income is U.S. source? a . So b. $50,00 c. $85,000 d. $100,000
An investor is in a 29% marginal tax bracket, and receives $200 in dividends from a Canadian corporation. How much tax must they pay on the dividend? (Assume a 38% gross-up, the dividend tax credit is 25% and the foreign withholding tax is 15 %). a) $80.04b) $11.04c) $0 d) None of the other answers is correct.

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