Questions from General Taxation

Q: Willa, a U.S. corporation, owns the rights

Willa, a U.S. corporation, owns the rights to a patent related to a medical de- vice. Willa licenses the rights to use the patent to IrishCo, which uses the patent in its manufacturing facility locate...

Q: USCo incurred $100,000 in interest expense for the current

USCo incurred $100,000 in interest expense for the current year. The tax book value of USCo’s assets generating foreign-source income is $5 million. The tax book value of USCo’s assets generating U.S....

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: Klein, a domestic corporation, receives a $10,000

Klein, a domestic corporation, receives a $10,000 dividend from ForCo, a wholly owned foreign corporation. The deemed-paid (indirect) foreign tax credit associated with this dividend is $3,000. What i...

Q: ABC, Inc., a domestic corporation, reports $50 million

ABC, Inc., a domestic corporation, reports $50 million of taxable income, including $15 million of general limitation foreign-source taxable income, on which ABC paid $5 million in foreign income taxe...

Q: USCo, a domestic corporation, reports worldwide taxable income of $

USCo, a domestic corporation, reports worldwide taxable income of $1.5 mil- lion, including a $400,000 dividend from ForCo, a wholly owned foreign corporation. ForCo’s undistributed E & P totals $16 m...

Q: Fleming, Inc., a domestic corporation, operates in both Canada

Fleming, Inc., a domestic corporation, operates in both Canada and the United States. This year, the business generated taxable income of $400,000 from foreign sources and $300,000 from U.S. sources....

Q: Dorcas incurs the following research expenditures. In-house wages

Dorcas incurs the following research expenditures. In-house wages………………………………. $60,000 In-house supplies ………………………………. 5,000 Paid to ABC, Inc., for research……………. 80,000 a. Determine the amount of qu...

Q: Food, Inc., a domestic corporation, owns 70% of

Food, Inc., a domestic corporation, owns 70% of the stock of Drink, Inc., a foreign corporation. For the current year, Food receives a dividend of $20,000 from Drink. Drink’s E & P (after taxes) and f...

Q: USCo owns 65% of the voting stock of LandCo, a

USCo owns 65% of the voting stock of LandCo, a Country X corporation. Terra, an unrelated Country Y corporation, owns the other 35% of LandCo. LandCo owns 100% of the voting stock of OceanCo, a Countr...