Which of the following statements regarding income

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118. Which of the following statements regarding income sourcing isnotcorrect?a. U.S. persons benefit from earning low-tax foreign-source income.b. Foreign persons generally benefit from avoiding U.S.-source income classification.c. U.S. persons are not concerned with source of income because all their income is subject to U.S. tax undera worldwide system.d. Foreign persons may be subject to tax on U.S.-source income without regard to their actual presence in theUnited States.ANSWER:c
119. ForCo, a foreign corporation, receives interest income of $50,000 from USCo, an unrelated domesticcorporation. USCo historically has earned 79% of its gross income from active foreign-source businessincome. What amount of ForCo’s interest income is U.S.source?d
120. WorldCo, a foreign corporation not engaged in a U.S. trade or business, receives $50,000 in interest incomefrom deposits with the foreign branch of a U.S. bank. The U.S. bank earns 78% of its income from foreignsources. How much of WorldCo’s interest income is U.S. source?a
121. GlobalCo, a foreign corporation not engaged in a U.S. trade or business, receives $80,000 in interest incomefrom deposits with the foreign branch of a U.S. bank. The U.S. bank earns 24% of its income from foreignsources. How much of GlobalCo’s interest income is U.S. source?a
122. Which of the following statements is true, concerning the sourcing of income from inventory produced by thetaxpayer in the U.S. and sold outside the U.S.?a. Because the inventory is manufactured in the U.S., all of the inventory income is U.S. source.b. If title passes on the inventory outside the U.S., all of the inventory income is foreign source.
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Chapter 10 / Exercise 10-12
Financial Accounting: The Impact on Decision Makers
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Chapter 9:Taxation of International Transactionsc. The taxpayer may use the 50-50 method to source one-half the income based on title passage and one-halfthe income based on where the sale negotiation takes place.d. The taxpayer may use the 50-50 method to source one-half the income based on title passage and one-halfthe income based on location of production assets.d
Chapter 9:Taxation of International Transactions123. AirCo, a domestic corporation, purchases inventory for resale from unrelated distributorswithinthe UnitedStates and resells this inventory to customers outside the United States, with title passing outside the UnitedStates. What is the source of AirCo’s inventory sales income?b

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Term
Spring
Professor
Wandrei
Tags
Taxation in the United States
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The document you are viewing contains questions related to this textbook.
Financial Accounting: The Impact on Decision Makers
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 10-12
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified

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