Connect Online Access for International Accounting
5th Edition
ISBN: 9781260248463
Author: Doupnik, Timothy
Publisher: Mcgraw-hill Higher Education (us)
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 25EP
a.
To determine
Calculate the amount of U.S. taxable income.
b.
To determine
Calculate the amount of foreign tax credit.
c.
To determine
Calculate the net tax liability of U.S.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Brandy, a U.S. corporation, operates a manufacturing branch in Chad, which does not have an income tax treaty with the United States. Brandy’s world- wide Federal taxable income is $30,000,000; it is subject to a 21% marginal tax rate. Profits and taxes in Chad for the current year are summarized as follows. Compute Brandy’s foreign tax credit associated with its operations in Chad.
Indeco, a U.S. C corporation, operates Grange, a sales branch in Staccato. Indeco’s U.S. marginal income tax rate is 21%; it is 15% for Staccato. Grange’s pretax profit for the year is $1,000,000. There is no income tax treaty between the United States and Staccato. Staccato’s currency is the U.S. dollar. Com- pute Indeco’s combined U.S. and foreign income tax on the Grange profits under each of the following assumptions.
Please help me with this question:
IrishCo, a manufacturing corporation resident in Ireland, distributes products through a U.S. office. Current-year taxable income from such sales in the United States is $12,000,000. IrishCo's U.S. office deposits working capital funds in short-term certificates of deposit with U.S. banks. Current-year interest income from these deposits is $150,000.
IrishCo also invests in U.S. securities traded on the New York Stock Exchange. This investing is done by the home office. For the current year, IrishCo has realized capital gains of $300,000 and dividend income of $50,000 from these stock investments. Compute IrishCo's U.S. tax liability, assuming that the U.S.-Ireland income tax treaty reduces withholding on dividends to 15% and on interest to 5%.
Assume a 21% U.S. tax rate.
IrishCo's U.S. tax liability is $
Chapter 8 Solutions
Connect Online Access for International Accounting
Ch. 8 - Prob. 1QCh. 8 - Prob. 2QCh. 8 - Prob. 3QCh. 8 - 4. What is the difference between the worldwide...Ch. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - 13. What is treaty shopping?
Ch. 8 - What is base erosion and profit shifting (BEPS)?Ch. 8 - What is the purpose of the OECDs base erosion and...
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Prob. 16QCh. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - Prob. 21QCh. 8 - Prob. 22QCh. 8 - Prob. 23QCh. 8 - Prob. 1EPCh. 8 - Prob. 2EPCh. 8 - Prob. 3EPCh. 8 - 4. Why might companies have an incentive to...Ch. 8 - Prob. 5EPCh. 8 - Prob. 6EPCh. 8 - Prob. 7EPCh. 8 - Prob. 8EPCh. 8 - Prob. 9EPCh. 8 - Prob. 10EPCh. 8 - Prob. 11EPCh. 8 - Prob. 12EPCh. 8 - Prob. 13EPCh. 8 - Prob. 14EPCh. 8 - Prob. 15EPCh. 8 - Prob. 16EPCh. 8 - Prob. 17EPCh. 8 - Prob. 18EPCh. 8 - Prob. 19EPCh. 8 - Prob. 20EPCh. 8 - Heraklion Company (a U.S.-based company) is...Ch. 8 - Prob. 22EPCh. 8 - Prob. 23EPCh. 8 - Prob. 24EPCh. 8 - Prob. 25EPCh. 8 - Prob. 26EPCh. 8 - Prob. 27EPCh. 8 - Prob. 28EPCh. 8 - Prob. 29EPCh. 8 - Prob. 1C
Knowledge Booster
Similar questions
- ) USCo purchases widgets in the United States and sells them abroad with title on resale passing in the foreign country whose operations sold the widget. In addition to earning $100,000 of taxable income from U.S. sales, USCo earns $100,000 of taxable income from Canadian sales by its Canadian branch that is subject to tax in Canada at a 25% rate. USCo also has a Hong Kong branch that earns $100,000 of taxable income that is subject to Hong Kong tax at a 15% rate. Any facts stated in an individual question relate solely to that question. Q. If the $100,000 of taxable income earned by the Hong Kong branch constitutes interest income from various Hong Kong banks on which the Hong Kong branch incurs withholding tax at a rate of 15%, what is USCo's foreign tax credit? (a) $0. (b) $40,000. (c) $36,000. (d) $42,000. (e) $15,000 in the branch limitation category and $21,000 in the passive limitation category.Q. If USCo manufactures the…arrow_forwardIndeco, a U.S. C corporation, operates Grange, a sales branch in Staccato. Indeco's U.S. marginal tax rate is 21%; it is 15% for Staccato. Grange's pre-tax profit for the year is $1,000,000. There is no income tax treaty between the United States and Staccato. Staccato's currency is the U.S. dollar. Compute Indeco's combined U.S. and foreign income tax on the Grange profits, under each of the following assumptions. If an amount is zero, enter "0". If required, use the minus sign to indicate a "refund".arrow_forwardChapeau Company, a U.S. corporation, operates through a branch in Champagnia. The source rules used by Champagnia are identical to those used by the United States. For 2022, Chapeau has $9,600 of gross income: $5,760 from U.S. sources and $3,840 from sources within Champagnia. The $5,760 of U.S. source income and $3,360 of the foreign source income are attributable to manufacturing activities in Champagnia (foreign branch income). The remaining $480 of foreign source income is passive category interest income. Chapeau had $2,400 of expenses other than taxes, all of which are allocated directly to manufacturing income ($960 of which is apportioned to foreign sources). Chapeau paid $568 of income taxes to Champagnia on its manufacturing income. The interest income was subject to a 10 percent withholding tax of $48. Compute Chapeau's total allowable foreign tax credit in 2022. Note: Do not round any division. Round other intermediate computations to the nearest whole dollar amount. Total…arrow_forward
- USCo purchases doodads in the United States and sells them abroad with title on resale passing in the foreign country whose operations sold the doodad. In addition to earning $100,000 of taxable income from U.S. sales, USCo earns $100,000 of taxable income from Canadian sales by its Canadian branch that is subject to tax in Canada at a 25% rate. USCo also has a Hong Kong branch that earns $100,000 of taxable income from sales that is subject to Hong Kong tax at a 15% rate. What is the foreign tax credit limitation?arrow_forwardThe Tax Code provides that an international carrier doing business in the Philippines shall pay a tax of two and 1⁄2 percent on its Gross Philippine Billings. What is meant by Gross Philippine Billings?arrow_forwardSkane Shipping Ltd. (SSL) operates a fleet of container ships in international trade between Sweden and Singapore. All of the shipping income (that is, that related to SSL's ships) is deemed to be earned in Sweden. SSL also owns a dock facility in Singapore that services SSL's fleet. Income from the dock facility is deemed to be earned in Singapore. SSL's income deemed attributable to Sweden is taxed at a 75 percent rate. Its income attributable to Singapore is taxed at a 25 percent rate. Last year, the dock facility had operating revenues of $11 million, excluding services performed for SSL's ships. SSL's shipping revenues for last year were $84 million. Operating costs of the dock facility totaled $14 million last year and operating costs for the shipping operation, before deduction of dock facility costs, totaled $50 million. No similar dock facilities in Singapore are available to SSL. However, a facility in Malaysia would have charged SSL an estimated $8 million for the services…arrow_forward
- Godoarrow_forwardCastor & Pollux Limited is an Australian firm whose shares trade on the ASX. The firm earn part of its domestically income in Australia and and part of its income overseas, where it is required to pay tax to the foreign governments where it operates. Currently, the Australian corporate tax rate is 25% and the Medicare levy is 2%. Castor & Pollux provides dividend imputation to Australian-resident shareholders from its Australian tax paid. Assume that Castor & Pollux pays a 85 % partly-franked dividend of $14.32 thousand to an Australian shareholder who currently has a taxable income of $250 thousand before dividends and a marginal tax rate of 32.5% and is NOT exempted from paying Medicare levy. Compute the franking credits this investor would receive from the partly-franked dividend received. O a. $4057.33 O b. $2148.00 c. $3109.83 d. $84197.24 e. $83779.87 O f. $2282.85 g. $1915.30arrow_forwardGhana has not entered into Double Taxation Agreement (DTA) with the government of Nigeria. Kumuga, a resident person of Ghana approached you this morning to explain to him whether foreign tax credit relief covers those residents trading in Nigeria.RequiredState your responses to Kumuga on the above issue? b. Amafiman Rural Bank commenced operation on 1st January, 2018, preparing account to 31st December each year. The Income statement for the year ended 31st December, 2019 is shown below.Income statement for the year ended 31st December, 2019 GH¢Profit before tax 700,000arrow_forward
- Paper is a resident foreign corporation with branches nationwide, including the Philippines. Its Philippine branch had an income of P10,000,000 in 2020 and it earmarked P8,000,000 for remittance. It actually remitted P7,000,000. How much is the branch profit remittance tax due of the Philippine branch?arrow_forwardThe following information relates to Swans Ltd, a vendor, and a resident of the Republic, for its tax period (a two-month period) ended 31 December 2022: Supplies of goods made by it subject to value-added tax at the standard rate amounted to R345 000 (R300 000 plus value-added tax of R45 000). Supplies of goods or services made by it subject to value-added tax at the zero-rate amounted to R100 000 (R100 000 plus value-added tax of Rnil). These goods were exported. Supplies of goods or services made by it not subject to value-added tax (exempt) amounted to R30 000 (R30 000 plus value-added tax of Rnil). Input tax of R50 000 was incurred by it for capital goods purchased. Input tax incurred for goods and services supplied to it was R25 000. Second-hand goods (not of a capital nature) were purchased by it from a non-vendor for R23 000 and paid for in cash. A debtor who owed it R69 000 (R60 000 plus value-added tax of R9 000) was liquidated during this period. A first and final…arrow_forwardBUT PTE Singapore in Semarang obtained net income in 2021 as follows: Domestic Fiscal income IDR 400.000.000 Income from Deviden in Singapore (15% tax rate) IDR 100.000.000 Income from Loan in Vietnam (20% tax rate) IDR 250.000.000 Income from Royalti in Malaysia (35% tax rate) IDR 200.000.000 Loss Income from India (17% tax rate) (IDR 100.000.000) (Financial information of BUT PTE Singapore that Gross Income is Rp. 35.000.000.000 and Fiscal Costs are Rp 31.000.000.000) Calculate Tax Payable!arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
