1 chang an nra is employed by fisher inc a foreign corporation in november chang spe 4526199

1.
Chang, an NRA, is employed by Fisher, Inc., a foreign
corporation. In November, Chang spends 10 days in the United States performing
consulting services for Fisher’s U.S. branch. She earns $5,000 per month. A
month includes 20 workdays.
a. Chang has $2,500
U.S.-source income which is exempt from U.S. taxation, because she is in the
U.S. for 90 days or less.
b. Chang has $2,500
U.S.-source income which is exempt from U.S. taxation, because the amount paid
to her is less than $3,000.
c. Chang has $2,500
U.S.-source income, because her foreign employer has a U.S. branch.
d. Chang has no
U.S.-source income, under the commercial traveler exception.

2.
USCo, a U.S. corporation, purchases inventory from
distributors within the U.S. and resells this inventory to customers outside
the U.S., with title passing outside the U.S. Profit on the sale is $10,000.
What is the source of the USCo’s inventory sales income?
a. $5,000 U.S. source
and $5,000 foreign source.
b. $5,000 U.S. source
and $5,000 sourced based on location of the pertinent manufacturing assets.
c. $10,000 U.S. source.
d. $10,000 foreign
source.
3.
Liang, an NRA, is sent to the United States by Fuller
Corporation, her foreign employer. She spends 50 days in the United States and
earns $20,000 for a two-month period. This amount is attributable to 40 U.S.
working days and 10 non-U.S. working days. Her employer does not have a U.S.
trade or business and Liang spends no other time in the U.S. for the tax year.
Liang’s U.S.­source taxable income is:
a.
$20,000.
b.
$16,000.
c.
$3,000.
d. $0.

4. Olaf, a citizen of
Norway with no trade or business activities in the United States, sells at a
gain 200 shares of
MicroShift, Inc., a U.S. company.
The sale takes place through Olaf’s broker in Oslo. How is this gain treated
for
U.S. tax purposes?
a. It is foreign-source
income subject to U.S. taxation.
b. It is foreign-source
income not subject to U.S. taxation.
c. It is U.S.-source
income subject to U.S. taxation.
d. It is U.S.-source
income exempt from U.S. taxation.

5. During the current
year, USACo (a domestic corporation) sold equipment to FrenchCo, a foreign
corporation, for
$350,000, with title passing to
the buyer in France. USACo purchased the equipment several years ago for $100,000
and took $80,000 of depreciation deductions on the equipment, all of which were
allocated to U.S.-source income. USACo’s adjusted basis in the equipment is
$20,000 on the date of sale. What is the source of the $330,000 gain on the
sale of this equipment?
a.
$330,000 foreign source. b. $330,000 U.S. source.
c. $250,000 foreign
source and $80,000 U.S. source.
d. $250,000 U.S. source
and $80,000 foreign source.

6. Qwan, a U.S.
corporation, reports $250,000 interest expense for the tax year. None of the
interest relates to
nonrecourse debt or loans from
affiliated corporations. Qwan’s U.S. and foreign assets are reported as
follows.

Fair
market value—

U.S.
assets

$5,000,000

Foreign
assets

$10,000,000

Tax book value—

U.S.
assets

$2,000,000

Foreign
assets

$6,000,000

How should Qwan
assign its interest expense between U.S. and foreign sources to maximize its
FTC for the current year?
a. Using tax book
values.
b. Using tax book value
for U.S. source and fair market value for foreign source.
c. Using fair market
values.
d. Using fair market
value for U.S. source and tax book value for foreign source.

7.
Which of the following statements best describes the purpose
of § 482, under which the Treasury can reallocate
income and deductions among related
taxpayers?
a. To provide tax
benefits to U.S. multinationals that export U.S. produced property.
b. To allow the IRS to
select the best method for determining transfer prices for U.S. taxpayers.
c. To alleviate double
taxation problems generated by related entities doing business in two or more
countries.
d. To place a controlled
entity on a tax parity with an uncontrolled entity with regard to prices
charged by the entities.

8. Section 482 is used
by the Treasury to:
a. Force taxpayers to
use arms-length transfer pricing on transactions between related parties.
b.
Reallocate income, deductions, etc., to a related taxpayer
to minimize tax liability.
c.
Increase information that is reported about U.S.
corporations with non-U.S. owners.
d.
All of the above.
e.
None of the above.

9. An advance pricing
agreement (APA) is used between:
a. Two or more
governments.
b.
Two related taxpayers.
c.
The taxpayer and the IRS.
d.
The IRS and U.S. taxing authorities.

10.Flapp Corporation, a
U.S. corporation, conducts all of its transactions in the U.S. dollar. It sells
inventory for $1 million to a Canadian company when the exchange rate is $1US:
$1.2Can. The Canadian company pays for the inventory when the exchange rate is
$1US: $1.25Can. What is Flapp’s exchange gain or loss on this sale?
a. Flapp does not have a
foreign currency exchange gain or loss, since it conducts all of its
transactions in the U.S. dollar.
b. Flapp’s account
receivable for the sale is $1 million (when the exchange rate is $1US:
$1.2Can.) and it collects on the receivable when the exchange rate is $1US:
$1.25Can. Flapp has an exchange gain of $50,000.
c. Flapp’s account
receivable for the sale is $1 million (when the exchange rate is $1US:
$1.2Can.). It collects on the receivable at $1US: $1.25Can. Flapp has an
exchange loss of $5,000.
d.
Flapp’s foreign currency exchange loss is $50,000.

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount