Davenport ACCT640 Chapter 25 – Taxation of International
Transactions – Quiz
Review Test Submission: Chapter 25 Quiz
Instructions
• Question
1
2 out of 2 points
A foreign corporation, not
resident in a treaty country, has a U.S. branch that earns effectively
connected E & P of $4 million for the tax year and increases its
investments in U.S. property (its U.S. net equity) by $1,600,000. It pays a
U.S. corporate income tax of $2,153,846. Its branch profits tax is:
Answer
• Question
2
2 out of 2 points
The purpose of the transfer
pricing rules is to ensure that taxpayers have ultimate flexibility in shifting
profits between related entities.
• Question
3
2 out of 2 points
All of an NRA’s U.S.-source
income that is not effectively connected with a U.S. trade or business is
subject to a flat U.S. income tax rate of 30% unless modified by a treaty.
• Question
4
2 out of 2 points
Which of the following statements
regarding income sourcing is not correct?
• Question
5
2 out of 2 points
Shannon, a foreign person with a
green card, spends the following days in the United States.
2008 360 days
2009 150 days
2010 30 days
Shannon’s residency status for 2010 is:
• Question
6
2 out of 2 points
Which of the following
determinations does not require knowing the amounts of one’s U.S.- versus
foreign-source income?
• Question
7
2 out of 2 points
Miles is a citizen of France and
does not have permanent resident status in the United States. During the last
three years he has spent a number of days in the United States.
Current year – 150 days
First prior year – 150 days
Second prior year – 90 days
Is Miles treated as a U.S. resident for the current year?
• Question
8
2 out of 2 points
Which of the following statements
regarding a foreign person’s U.S. tax consequences is true?
• Question
9
2 out of 2 points
In allocating interest expense
between U.S. and foreign sources, a taxpayer must use the tax basis of assets
in determining the proper interest apportionment.
• Question
10
2 out of 2 points
SunCo, a domestic corporation,
owns a number of patents related to designing sunglasses. SunCo licenses these
patents to unrelated parties. SpainCo, a Spanish corporation, paid SunCo
$78,000 in royalties related to these licenses. SpainCo uses the patent
information in its manufacturing process in its Texas plant. WiscCo, a domestic
corporation, paid SunCo $32,000 in royalties related to the licenses. WiscCo
uses the patent information in its manufacturing process in its German
manufacturing plant. How much foreign-source royalty income did SunCo earn from
these licenses?
