C12-Chp-09-2-HW-Prb-International

C12-Chp-09-2-HW-Prb-International -...

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b052fa3c52908bfa7c1f1066265ca9e7d52bde80.doc. Page 1 of 4 First Name Last Name: Home work-Chapter 9. Turn in one copy of your solutions page at the start of class. (21 @ 5 Pts. = 105) This homework has been updated for Spring 2011. Current year is 2011. Introduction to U.S. Taxation of Global Income 1 [Slide 2, Text Pg. 3] The United States income tax system (that is applicable to its citizens and domestic corporations) is: a. a world-wide system b. a territorial system c. none of these 2 [Slide 4, Sec. 7701(a)(4) and (5), Sec. 1442 ] Which of the following types of income is not subject to income tax by the United States: Company Information Type of Income Earned in What Country a. Domestic Corporation Manufacturing Income China b. Foreign Corporation Manufacturing Income China c. Domestic Corporation Rental Income China d. Foreign Corporation Rental Income United States Territorial System 3 [Slide 10] Bud is citizen of United States. Bud worked in U.S. from January 1, 2011 through June 30, 2011. He then moved to the U.K., where he worked for the last 6 months of 2011. He earned $100,000 in first 6 months in the United States. He earned $100,000 in last 6 months while working in the U.K. Assume all income is taxable (no deductions allowed in either country). The U.S. income tax rate is 40%. The U.K. income tax rate is 35%. Assume each country has a tax system that is territorial in scope. What is the total income tax Bud will pay for 2011 in both countries? (Ignore state income tax.) a. $40,000 b. $70,000 c. $75,000 d. $80,000 e. $115,000 World-wide System and Double Taxation 4 [Slide 12] Bud is citizen of United States. Bud worked in U.S. from January 1, 2011 through June 30, 2011. He then moved to the U.K., where he worked for the last 6 months of 2011. He earned $100,000 in first 6 months in the United States. He earned $100,000 in last 6 months while working in the U.K. Assume all income is taxable (no deductions allowed in either country). The U.S. income tax rate is 40%. The U.K. income tax rate is 35%. Assume each country has a tax system that is world-wide in scope for its citizens . There is no provision for limiting double taxation of income (no foreign tax deduction or credit -- and no exclusion of foreign earned income). What is the total income tax Bud will pay for 2011 in both countries? (Ignore state income tax.) a. $40,000 b. $70,000 c. $75,000 d. $80,000 e. $115,000 World-wide System and Foreign Tax Deduction 5 [Slide 14] Bud is citizen of United States. Bud worked in U.S. from January 1, 2011 through June 30, 2011. He then moved to the U.K., where he worked for the last 6 months of 2011. He earned $100,000 in first 6 months in the United States. He earned $100,000 in last 6 months while working in the U.K. Assume all income is taxable (no deductions allowed). The U.S. income tax rate is 40%. The U.K. income tax rate is 35%. Assume each country has a tax system that is world-wide in scope for its citizens
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C12-Chp-09-2-HW-Prb-International -...

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