THE-WFT08-06-1001-ch_13_V4-SM

THE-WFT08-06-1001-ch_13_V4-SM - CHAPTER 13...

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CHAPTER 13 MULTIJURISDICTIONAL TAXATION SOLUTIONS TO PROBLEM MATERIALS Status: Q/P in Question/ Present Prior Problem Topic Edition Edition 1 U.S. taxing authority Unchanged 1 2 Income tax treaties Unchanged 2 3 Territorial versus credit systems Unchanged 3 4 Income sourcing New 5 Expense apportionment New 6 Foreign tax credit calculation New 7 Foreign tax credit calculation Unchanged 7 8 Foreign tax credit calculation Unchanged 8 9 Excess foreign tax credits Unchanged 9 10 Deemed paid foreign tax credit Unchanged 10 11 FTC separate basket limitations Unchanged 11 12 Subpart F policy rationale Unchanged 12 13 Subpart F income definition Unchanged 13 14 Subpart F income Unchanged 14 15 Foreign person engaging in U.S. trade or Unchanged 15 business 16 U.S. source investment income earned by a Unchanged 16 foreign person 17 FTC overall foreign losses Unchanged 17 18 State’s taxing authority Unchanged 18 19 Multistate Tax Commission Unchanged 19 20 Consequences of nexus Unchanged 20 21 Ethics problem Unchanged 21 22 State tax modifications Unchanged 22 23 Multistate income allocation Unchanged 23 24 Apportionment percentage calculations Modified 24 25 Apportionment percentage calculations Modified 25 26 Apportionment percentage calculations Modified 26 27 Passive investment subsidiaries Unchanged 27 28 Combined and consolidated returns allowed by Unchanged 28 the states 29 Streamlined sales tax project Unchanged 29 30 Multistate tax planning Unchanged 30 13-1
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13-2 2008 Entities Volume/Solutions Manual Bridge Status: Q/P in Discipline Present Prior Problem Topic Edition Edition 1 Information sharing agreements Unchanged 1 Research Problem 1 Internet activity Unchanged 1 2 Internet activity Unchanged 2 3 Internet activity Unchanged 3 4 Internet activity Unchanged 4 5 Internet activity Unchanged 5 6 Internet activity Unchanged 6 7 Internet activity Unchanged 7 8 Internet activity Unchanged 8 9 Internet activity Unchanged 9 10 Internet activity New
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Multijurisdictional Taxation 13-3 PROBLEMS 1. The United States taxes its citizens and residents (including domestic corporations, trusts, and estates) on their worldwide income. There is a reasonable basis for this broad reach from the government’s perspective. First, U.S. persons receive the benefits of U.S. legal protection no matter where in the world their income is earned. Second, the U.S. law does mitigate the potential for double taxation by allowing a foreign tax credit for foreign income taxes paid on any foreign-source income that is also included in U.S. taxable income. p. 13-6 2. If a U.S. person earns investment income in Germany, the United States–Germany income tax treaty will reduce the withholding tax rates on interest, dividends, rents, royalties, and other investment income items. If a U.S. person carries on business activities in Germany, the permanent establishment and business profits articles of the treaty will limit the scope of the activities that can create a permanent establishment in
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This note was uploaded on 04/19/2009 for the course BUSINESS ACCT 305 taught by Professor Poletti during the Spring '09 term at DeVry Columbus North.

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THE-WFT08-06-1001-ch_13_V4-SM - CHAPTER 13...

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