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Exam 13: The Us Taxation of Multinational Transactions

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Question 61

True/False

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Nexus involves the criteria used by a government to assert its right to tax a person or transaction within or without its borders.

A) True
B) False

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Question 62

Multiple Choice

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A rectangle with an inverted triangle within it is a symbol used to represent what organizational form?

A) Partnership
B) Corporation
C) Hybrid entity treated as a corporation for U.S. tax purposes
D) Hybrid entity treated as a partnership for U.S. tax purposes

E) A) and D)
F) B) and C)

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Question 63

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Portsmouth Corporation, a British corporation, is a wholly owned subsidiary of Salem Corporation, a U.S. corporation. During the year, Portsmouth reported the following income: $335,000 interest income received from a loan to an unrelated French corporation. $108,500 dividend income received from a less than 1 percent owned unrelated Dutch corporation. $167,000 rent income from an unrelated British corporation on property Portsmouth actively manages. $508,500 gross profit from the sale of inventory manufactured by Portsmouth in Great Britain and sold to a 100 percent owned subsidiary in Germany. What amount of subpart F income does Portsmouth recognize in the current year?

Appleton Corporation, a U.S. corporation, reported total taxable income of $10,000,000 in the current year. Taxable income included $2,500,000 of foreign source taxable income from the company's branch operations in the United Kingdom. All of the branch income is foreign branch income. Appleton paid U.K. income taxes of $500,000 on its branch income. Compute Appleton's net U.S. tax liability and any foreign tax credit carryover.

Guido was physically present in the United States for 150 days in 2020, 120 days in 2019, and 90 days in 2018. Under the substantial presence test formula, how many days is Guido deemed physically present in the United States in 2020?