Chapter 4 (73-105) Cases 2010

Chapter 4 (73-105) Cases 2010 - International Taxation...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: International Taxation Foreign Tax Credit Cases Read Chapter 4 (pp. 73-105). Case 1 Topco, Inc., a U.S. corporation, conducts business in New Zealand. Topco earned the following amounts from its New Zealand branch: $8,000,000 of general limitation income, and $4,000,000 of passive income. Topco has expenses associated with that income but, under New Zealand law, none of those expenses are allocated to a particular category of income. Applying the principles of Reg. 1.861-8, Topco directly applied $1,500,000 to general limitation income. $600,000 of expenses were not directly allocable to any class of income so those expenses were allocated in proportion to gross income; that is, $400,000 was applied against general limitation income, and $200,000 against passive income. After allocation of expenses, the results are as follows: Net general limitation income 6,100,000 Net passive income 3,800,000 Net taxable income 9,900,000 Under the particular New Zealand laws as applied to Topco, the $3,800,000 of passive income is...
View Full Document

Page1 / 2

Chapter 4 (73-105) Cases 2010 - International Taxation...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online