1. Dickens, a citizen and resident of the United Kingdom, occasionally purchases and sells securities on the New York and American Stock Exchanges. He effects his transactions through a stockbroker in New York City, who is instructed by telephone from London. During the tax year, Dickens made 20 purchases and 15 sales. He received dividends during the year of $30,000 from his shares. He realized gains of $20,000 from transactions involving his shares. What are his tax consequences if the 2016 Model Treaty applies?

2. In Problem 1 would Dickens’ U.S. taxes be reduced if he had realized losses of $230,000?

3. The broker in Problem 1 has recently suggested that Dickens give him discretionary authority to buy and sell “to exploit fast-breaking market conditions.” Would such an arrangement affect your earlier responses?