31. Bighley shows the following results for the year. Bighley offsets the general-basket loss against U.S.-sourceincome for the current tax year.U.S.-source income$5 million Foreign-source income, general FTC basket($2 million)Foreign-source income, passive FTC basket$3 million
32. A U.S. taxpayer may take a current FTC equal to the greater of the FTC limit or the actual foreign taxes (direct or indirect) paid or accrued.
33. Nico lives in California. She was born in Peru but holds a green card. Nico is a nonresident alien (NRA). True False
34. Freda was born and continues to live in Uruguay. She exports widgets to U.S. customers. The U.S. does not have in force an income tax treaty with Uruguay. Freda’s net U.S. income from the widgets is subject to a flat 30% Federal income tax rate.
35. Carol, a citizen and resident of Adagio, reports gross income that is effectively connected with a U.S. business. No deductions are allowed against this income, and Carol’s U.S. tax rate is a flat 30 percent.
36. A domestic corporationis one whose assets are primarily located in the U.S. For this purpose, the primarilylocatedtest (>50%) applies.
37. Quest is organized and operates in the U.K. Its U.S. effectively connected earnings for the taxable year are $900,000 and its net U.S. equity has increased by $40,000. Quest’s dividend equivalent amount for the tax year is $860,000. True False