Miguel is a citizen and resident of Brazil. During the current vear, Miguel never visits the UnitedStates nor does he hold a green card. However, he receives a dividend from Micro Corporation,receives interest on a bond issued by MBI Corporation, realizes a gain on the sale of ExtelCorporation stock, and realizes a gain on the sale of 1,000 acres of undeveloped land located inTexas. Micro, MBI and Extel are all corporations organized in the United States. The United States does not have an income tax treaty with brazil Describe the U.S. tax consequences of each of the above items of income. Also, indicate how our answers would change if Miquel held a green card

Miguel is a citizen and resident of Brazil. During the current vear, Miguel never visits the UnitedStates nor does he hold a green card. However, he receives a dividend from Micro Corporation,receives interest on a bond issued by MBI Corporation, realizes a gain on the sale of ExtelCorporation stock, and realizes a gain on the sale of 1,000 acres of undeveloped land located inTexas. Micro, MBI and Extel are all corporations organized in the United States. The United States does not have an income tax treaty with brazil Describe the U.S. tax consequences of each of the above items of income. Also, indicate how our answers would change if Miquel held a green card

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter25: Taxation Of International Transact Ions

Section: Chapter Questions

Problem 38P

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Miguel is a citizen and resident of Brazil. During the current vear, Miguel never visits the UnitedStates nor does he hold a green card. However, he receives a dividend from Micro Corporation,receives interest on a bond issued by MBI Corporation, realizes a gain on the sale of ExtelCorporation stock, and realizes a gain on the sale of 1,000 acres of undeveloped land located inTexas. Micro, MBI and Extel are all corporations organized in the United States. The United States does not have an income tax treaty with brazilDescribe the U.S. tax consequences of each of the above items of income. Also, indicate how our answers would change if Miquel held a green card.
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to Kl Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following chart outlines the details of the assets. Inventory Automobile Patent Customer list FMV ACB UCC $ 260,000 $ 22,500 52,000 $ 30,000 50,000 100,000 60,000 16,500 30,000 Required: $432,500 $ 142,000 $ 46,500 For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets. FMV ACB UCC Elected amount Cash Preferred Shares Inventory $ 260,000 $ 52,000 0…
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following is the details of the assets: Land Building Equipment. Goodwill Land Building Equipment Goodwill FMV ACB $ 230,000 $ 46,000 $ 115,000 10,350 46,000 $ 401,350 $ 181,000 $ 84,275 Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets $ FMV $ 230,000 $ 115,000 10,350 46,000 401,350 80,500 34,500 20,000 ACB 46,000 80,500 $ 34,500 UCC 0…
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following chart outlines the details of the assets. UCC FMV $ 260,000 $ 22,500 50,000 100,000 ACB 52,000 30,000 60,000 0 $ 432,500 $ 142,000 $ Inventory Automobile Patent Customer list Inventory Automobile Patent Customer list $ Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets. $ FMV 260,000 $ 22,500 50,000 100,000 432,500 $ ACB $…
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following is the details of the assets: FMV UCC $ 230,000 115,000 10,350 46,000 АСВ $ 46,000 80,500 34,500 20,000 $ 181,000 Land Building Equipment 57,500 9,200 17,575 $ 84,275 Goodwill $ 401,350 Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets Elected Preferred FMV ACB UCC Cash amount Shares Land $ 230,000 $ 46,000 Building 115,000…
Maki is a stockholder in both Agrix Corporation (domestic corporation) andAtlanta corporation (non-resident foreign corporation). During the year, Jhaeronearned P100,000 dividends from Agrix and P300,000 dividends from Atlanta.Maki is a Filipino citizen residing in the Philippines. How much of the dividendincome of Maki is subject to income tax in the Philippines?
John, a US citizen, and Ella, a Canadian citizen (her US tax status is non-resident alien) were recently married in Toronto, Canada, where they reside. John is a shareholder in USAUSA,Inc, an S corporation. As a wedding gift, John gave 100 shares of his S corporation stock to Ella. This gift of stock to Ella will have no impact on the tax status of the USAUSA, Inc. Question 8 options: True False
5. Five unrelated U.S. individuals own all of the shares of Popping, a corporation organized and operating fully in the country Vivace. Mariam, one of the shareholders, asks you whether the income from Popping will be taxed to her immediately as earned; she believes the entity is classified as "a controlled foreign corporation (CFC)." Explain how the Federal income tax law applies to the profits earned by Popping. Use the correct Federal income tax terminology in your comments.
Coleen is a citizen and bona fide resident of Ireland. During the current year, she received the following income: Cash dividends of $2,000 from a U.S. corporation's stock. Interest of $1,000 on a U.S. corporation bond. Royalty of $100,000 from a U.S. corporation for use of a patent she developed. Rent of $3,000 from U.S. individuals renting her cottage in Maine. Identify the U.S. withholding tax rate on the payment of each item of income under the U.S.–Ireland income tax treaty and cite the appropriate treaty article. You can access the 1997 U.S.–Ireland income tax treaty on the IRS website, www.irs.gov. Note: Leave no answer blank. Enter zero if applicable.
(f) Kanye, an offshore RLWT person, has sold land in New Zealand. The sale proceeds are taxable under the bright‐line test. Kanye purchased the property at a cost of $750,000 and sold it for $800,000. Kanye has a $400,000 registered mortgage on the property with the BNZ in New Zealand, and has no outstanding rates. The purchaser paid a deposit of $60,000 in January 2018, and will pay the balance of the purchase price in March 2018. Kanye has a conveyancer who will be the paying agent in relation to the RLWT. When does the RLWT obligation arise, and how much RLWT is payable?
For all of 2022, A, a U.S. citizen, owns 8% of a controlled foreign corporation (“CFC”) outright. A also owns 20% of another foreign corporation (“FC”) which owns 5% of CFC. The balance of FC is owned by a U.S. income tax nonresident alien (“NRA”). The balance of CFC is owned 1% by A’s U.S. citizen son (“S”) and 86% by A’s long-time U.S. income tax resident alien (“RA”) friend (“F”). If CFC has 2022 so-called tainted or subpart F income of $500,000, how much will A have to report in his 2022 gross income? Group of answer choices $40,000 $50,000 $45,000 $500,000
Read each case and specify which standard was violated 1.Aziza works for a multinational investment adviser based in the USA, she has US citizenship since 2020. She lives and works as a registered investment adviser in the tiny, but wealthy, island nation. The securities laws state that no investment adviser registered and working in that country can participate in initial public offerings (IPOs) for the adviser’s personal account. Aziza, believing that as an American citizen working for a U.S.-based company she should comply only with U.S. law, has ignored this Karrambian law. In addition, Aziza believes that, as a charter holder, as long as she adheres to the Code and Standards requirement that she disclose her participation in any IPO to her employer and clients when such ownership creates a conflict of interest, she is meeting the highest ethical requirements.