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Jilt, a non-U.S. corporation, not resident in a treaty country, operates a U.S. branch that earns effectively connected E & P of $4 million for the tax year. The branch increases its investments in U.S. property (its U.S. net equity) by $1,600,000. The branch pays a U.S. corporate income tax of $2,153,846. Jilt’s branch profits tax is:
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83.A nonU.S. individual’s “green card” remains in effect until: a.The individual discards it. b.The individual leaves the U.S. c.The individual has abandoned lawful permanent residency in the U.S. d.The individual remains outside the U.S. for two full years. ANSWER: c
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Kunst, a U.S. corporation, generates $100,000 of foreign-source income in the general income basket and $40,000 offoreignsource income in the passive income basket. Kunst’s worldwide taxable income is $1,200,000, and its U.S. tax liability before FTC is $420,000. Foreign taxes attributable to the general income basket are $60,000 and to the passive income are $4,000. What is Kunst’s foreign tax credit for the tax year
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Which of the following is a specific separate income “basket” for purposes of the foreign tax credit limitation calculation?
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Kilps, a U.S. corporation, receives a $200,000 dividend from a 20% owned foreign corporation. The deemed-paid taxes attributable to this dividend are $40,000 and foreign taxes withheld on remittance of the dividend are $30,000. Kilps’s U.S. tax liability before the FTC is $350,000, the gross dividend income is $240,000, and Kilps’s worldwide taxable income is $1 million. Kilps’s foreign tax credit for the taxable year is:
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An appropriate transfer price is one that considers the risks, assets, and functions of the persons to whom income is assigned.
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U.S. individuals who receive dividends from foreign corporations may claim the deemed-paid foreign tax credit related to such dividends.
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Kipp, a U.S. shareholder under the CFC provisions, owns 40% of a CFC. If the CFC’s Subpart F income for the
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Hendricks Corporation, a domestic corporation, owns 40 percent of Shane Corporation and 55 percent of Ferrell Corporation, both foreign corporations. Ferrell owns the other 60 percent of Shane Corporation. Both Shane and Ferrell are CFCs.
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Dividends received from Murdock Corp., a corporation organized in Sustenato that earns 70% of its income from U.S. business activities, are 70% U.S.-source income.
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Interest paid to an unrelated party by a domestic corporation that historically earns more than 50% of its gross income each year from the conduct of an active trade or business outside the United States is foreign-source income.
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