Questions from Taxation

Q: EFG, an accrual basis calendar year corporation, reported $500

EFG, an accrual basis calendar year corporation, reported $500,000 net income before tax on its financial statements prepared in accordance with GAAP. EFG’s records reveal the following information: T...

Q: Posse Corporation plans to form a foreign subsidiary through which to conduct

Posse Corporation plans to form a foreign subsidiary through which to conduct a new business in Country J. Posse projects that this business will operate at a loss for several years. a. To what extent...

Q: Halifax Inc. operates its business in Country U through a subsidiary

Halifax Inc. operates its business in Country U through a subsidiary incorporated under Country U law. The subsidiary has never paid a dividend and has accumulated more than $10 million after-tax earn...

Q: Togo Inc. has a subsidiary incorporated in Country H, which

Togo Inc. has a subsidiary incorporated in Country H, which does not have a corporate income tax. Which of the following activities generates subpart F income? a. The subsidiary buys woolen clothing p...

Q: Column Corporation has a subsidiary operating exclusively in Country A and a

Column Corporation has a subsidiary operating exclusively in Country A and a subsidiary operating exclusively in Country Z. a. Both subsidiaries were incorporated under Delaware law and are therefore...

Q: Delta Partnership carries on business in the United States and four other

Delta Partnership carries on business in the United States and four other countries. Explain why the ordinary income generated by the foreign business is a separately stated item on Delta’s Schedule K...

Q: Kantor Inc. owns 100 percent of Sub 1 (a CFC

Kantor Inc. owns 100 percent of Sub 1 (a CFC in a country with a 50 percent corporate tax) and 90 percent of Sub 2 (a CFC in a country with a 10 percent corporate tax). Kantor sells goods and services...

Q: NY is a New York corporation that manufactures office equipment in a

NY is a New York corporation that manufactures office equipment in a factory located in New York. In which of the following cases does NY have nexus with Pennsylvania? a. NY owns two retail outlets fo...

Q: Lefty Inc. sells its products to customers residing in Country X

Lefty Inc. sells its products to customers residing in Country X and Country Y. Both foreign jurisdictions have a 20 percent corporate income tax. This year, Lefty made more than $30 million of sales...

Q: Single individuals Sam and Zelle were married this year and filed their

Single individuals Sam and Zelle were married this year and filed their first joint return. To what extent did this change in filing status affect the following? a. Sam and Zelle’s aggregate standard...