Questions from Federal Taxation

Q: Castle Corporation conducts business in States 1, 2, and 3

Castle Corporation conducts business in States 1, 2, and 3. Castle’s $630,000 taxable income consists of $555,000 apportionable income and $75,000 allocable income generated from transactions conducte...

Q: The stock of Mulberry Corporation is owned by Archana (60%)

The stock of Mulberry Corporation is owned by Archana (60%) and Anar (40%), who are mother and daughter. Pursuant to a plan of complete liquidation adopted earlier in the current year, Mulberry distri...

Q: Draft a short speech that you will give to your university’s Business

Draft a short speech that you will give to your university’s Business Club. The title of your talk is “What Is Worldwide Taxation and How Can I Avoid It?” Be certain to include the term territorial ta...

Q: Liang, a U.S. citizen, owns 100%

Liang, a U.S. citizen, owns 100% of ForCo, a foreign corporation not engaged in a U.S. trade or business. Is Liang subject to any U.S. income tax on her dealings with ForCo? Explain.

Q: QuinnCo could not claim all of the income taxes it paid to

QuinnCo could not claim all of the income taxes it paid to Japan as a foreign tax credit (FTC) this year. What computational limit probably kept QuinnCo from taking its full FTC? Explain.

Q: Molly, Inc., a domestic corporation, owns 15% of

Molly, Inc., a domestic corporation, owns 15% of PJ, Inc., and 12% of Emma, Inc., both foreign corporations. Molly is paid gross dividends of $35,000 and $18,000 from PJ and Emma, respectively. PJ wit...

Q: Teal, Inc., a foreign corporation, pays a dividend to

Teal, Inc., a foreign corporation, pays a dividend to its shareholders on November 30. Red, Inc., a U.S. corporation and 7% shareholder in Teal, receives a dividend of 10,000K (a foreign currency). Pe...

Q: HiramCo, a U.S. entity, operates a manufacturing

HiramCo, a U.S. entity, operates a manufacturing business in both Mexico and Costa Rica, and it holds its investment portfolio in Sweden. How many foreign tax credit computations must HiramCo make? Be...

Q: “U.S. persons are taxed on their worldwide income

“U.S. persons are taxed on their worldwide income.” Explain.

Q: Packard, Inc., a domestic corporation, operates a branch in

Packard, Inc., a domestic corporation, operates a branch in Mexico. Over the last 10 years, this branch has generated $30 million in losses. For the last 3 years, however, the branch has been profitab...