Waltzs ftc is 50000 true false 30 unused foreign tax

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Income Tax Fundamentals 2020
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Chapter 2 / Exercise 17
Income Tax Fundamentals 2020
Altus-Buller/Whittenburg
Expert Verified
Waltz’s FTC is $50,000. True False
30. Unused foreign tax credits are carried back two years and then forward 20 years.
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Income Tax Fundamentals 2020
The document you are viewing contains questions related to this textbook.
Chapter 2 / Exercise 17
Income Tax Fundamentals 2020
Altus-Buller/Whittenburg
Expert Verified
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
38. Gains on the sale of U.S. real property held directly or indirectly through U.S. stock ownership by NRAs and foreign corporations are subject to tax at capital gains rates under FIRPTA.
39. In 2013, George renounces his U.S. citizenship and moves to Fredonia, where income tax rates are very low. George is a multimillionaire and says he “has had it” with high Federal income taxes on wealthy individuals like himself. In 2016, George’s U.S.-source income is $1.5 million. That income escapes Federal income taxes.
40. The purpose of the transfer pricing rules is to ensure that taxpayers have ultimate flexibility in shifting profits between related entities.
41. An appropriate transfer price is one that considers the risks, assets, and functions of the persons to whom income is assigned. True False
42. The U.S. system for taxing income earned outside its borders by U.S. persons is referred to as the territorialapproach, because only income earned within the U.S. border is subject to taxation.
43. The U.S. system for taxing income earned inside its borders by non-U.S. persons is referred to as inbound taxationbecause such foreign persons are earning income by coming into the United States.

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