1) Precision S.A., an Islandian corporation, is engaged in a golf club business in Islandia and the United States. The United States business is conducted through a foreign corporation. During each of the preceding five years, 35% of Precisions gross income was effectively connected with the United States business.

If Precision pays a dividend of $1000 to its sole shareholder, an Islandian holding company, how much of this is US source income?

2) A citizen of the US goes to Egypt as a student. As per Article 23 of the US treaty there are many tax benefits seemingly available to this person. Explain how, of if, a savings clause in the treaty effects these benefits.