The Ustaxation Of Multinational Transactions

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Business Income,Deductions,and Accounting Methods
Property Acquisition and Cost Recovery
Property Dispositions
Entities Overview
Corporate Operations
Accounting for Income Taxes
Corporate Taxation: Nonliquidating Distributions
Corporate Formation,Neorganization,and Liquidation
Forming and Operating Partnerships
Dispositions of Partnership Interests and Partnership Distributions
S Corporations
State and Local Taxes
The Ustaxation of Multinational Transactions
Transfer Taxes and Wealth Planning

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Question 1

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"Outbound taxation" deals with the U.S.tax rules that apply to U.S.persons doing business outside the United States.

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Question 2

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Amy is a U.S.citizen.During the year she earned income from an investment in a French company.Amy will be subject to U.S.taxation on her income under the principle of source-based taxation.

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Question 3

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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.

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Question 4

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The United States generally taxes U.S.sourced fixed and determinable,annual or periodic income (FDAP)earned by non-U.S.persons by applying a withholding tax to the gross amount of income.

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Question 5

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Philippe is a French citizen.During 2017 he spent 150 days in the United States on business.Because Philippe does not spend 183 days in the United States in 2017,he will not under any circumstances be treated as a resident alien for U.S.tax purposes.

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Question 6

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A non U.S.citizen with a green card will always be treated as a resident alien for U.S.tax purposes regardless of the number of days she spends in the United States during the current year.

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Question 7

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The foreign tax credit regime is the primary mechanism used by the United States government to mitigate or eliminate the potential double taxation of income earned by U.S.persons outside the United States.

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Question 8

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Marcel,a U.S.citizen,receives interest income from bonds issued by a Dutch corporation.The interest income will be considered U.S.source income for U.S.tax purposes.

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Question 9

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Cecilia,a Brazilian citizen and resident,spent 120 days working in the United States in the current year and earned $50,000.Because she spent more than 90 days in the United States,Cecilia's income will be treated as U.S.source and subject to U.S.taxation.The United States does not have an income tax treaty with Brazil.

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Question 10

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The gross profit from a sale of inventory manufactured in the United States and sold in Spain will always be treated as 100 percent U.S.source income.

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Question 11

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Deductible interest expense incurred by a U.S.corporation will always be treated as a U.S.source deduction.

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Question 12

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Once a U.S.corporation chooses a method to allocate interest expense,either fair market value or tax book value,that election cannot be changed without the permission of the commissioner of the Internal Revenue Service.

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Question 13

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Under most U.S.treaties,a resident of the other country must have a permanent establishment in the United States before being subject to U.S.taxation on business profits earned within the United States.

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Question 14

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Alex,a U.S.citizen,became a resident of Belgium in 2017.Alex will no longer be subject to U.S.taxation on income he earns in Belgium if such income is exempted from tax under the U.S.- Belgium treaty.

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Question 15

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Alhambra Corporation,a U.S.corporation,receives a dividend from its 100 percent owned Spanish subsidiary.For foreign tax credit purposes,the dividend will always be characterized as passive category income.

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Question 16

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All taxes paid to a foreign government by a U.S.corporation are creditable on the corporation's U.S.tax return.

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Question 17

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The Canadian government imposes a withholding tax of 15 percent on a dividend paid by a Canadian corporation to a U.S.individual.The withholding tax will be creditable on the individual's U.S.tax return as an "in lieu of" tax.

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Question 18

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U.S.individuals and corporations are eligible for a deemed-paid credit on dividends received from foreign corporations.

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Question 19

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A hybrid entity established in Ireland is treated as a flow-through entity for U.S.tax purposes and a corporation for Irish tax purposes.

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Question 20

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One of the tax advantages to using a corporation through which to earn income in Germany is deferral of U.S.taxation on active business income earned by the corporation until such income is remitted back to the United States.

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