Taxation of International Transactions – Quiz

Taxation of International Transactions – Quiz

Review Test Submission: Chapter 25 Quiz

Instructions

• Question 1

2 out of 2 points

A foreign corporation, not resident in a treaty country, has a U.S. branch that earns effectively connected E & P of $4 million for the tax year and increases its investments in U.S. property (its U.S. net equity) by $1,600,000. It pays a U.S. corporate income tax of $2,153,846. Its branch profits tax is:

Answer

• Question 2

2 out of 2 points

The purpose of the transfer pricing rules is to ensure that taxpayers have ultimate flexibility in shifting profits between related entities.

• Question 3

2 out of 2 points

All of an NRA’s U.S.-source income that is not effectively connected with a U.S. trade or business is subject to a flat U.S. income tax rate of 30% unless modified by a treaty.

• Question 4

2 out of 2 points

Which of the following statements regarding income sourcing is not correct?

• Question 5

2 out of 2 points

Shannon, a foreign person with a green card, spends the following days in the United States.

2008 360 days

2009 150 days

2010 30 days

Shannon’s residency status for 2010 is:

• Question 6

2 out of 2 points

Which of the following determinations does not require knowing the amounts of one’s U.S.- versus foreign-source income?

• Question 7

2 out of 2 points

Miles is a citizen of France and does not have permanent resident status in the United States. During the last three years he has spent a number of days in the United States.

Current year – 150 days

First prior year – 150 days

Second prior year – 90 days

Is Miles treated as a U.S. resident for the current year?

• Question 8

2 out of 2 points

Which of the following statements regarding a foreign person’s U.S. tax consequences is true?

• Question 9

2 out of 2 points

In allocating interest expense between U.S. and foreign sources, a taxpayer must use the tax basis of assets in determining the proper interest apportionment.

• Question 10

2 out of 2 points

SunCo, a domestic corporation, owns a number of patents related to designing sunglasses. SunCo licenses these patents to unrelated parties. SpainCo, a Spanish corporation, paid SunCo $78,000 in royalties related to these licenses. SpainCo uses the patent information in its manufacturing process in its Texas plant. WiscCo, a domestic corporation, paid SunCo $32,000 in royalties related to the licenses. WiscCo uses the patent information in its manufacturing process in its German manufacturing plant. How much foreign-source royalty income did SunCo earn from these licenses?