16. A non-U.S. corporation investor held a real estate asset (a parcel of land) that that was purchased for $50,000,000 for 10 years and will sell it for $70,000,000. The investor gain on the sale of the asset is considered to in a business that is effectively connected to a U.S. trade or business (ECI).

1. Compute the tax on the sale assuming that the investor held the asset directly (consider both ECI and branch profits tax)

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2. How would the answer in (a) change if the investor was a non-US individual and held the asset directly (consider both ECI and branch profits tax)

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3. Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with a 5% treaty rate on dividends and the $50,000,000 original investment was funded with $10,000,000 of shareholder loans which have accrued $5,000,000 of interest, assuming no plan of liquidation is made for distributions related to the sale. Take into account, corporate tax, dividend withholding and interest income earned by the non-US owner of the corporation.

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4. Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with no treaty rates on dividends, and assuming no plan of liquidation is made for distributions related to the sale

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5. Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with no treaty rates on dividends and assuming a plan of liquidation is made for distributions in the year of the sale

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