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Posted on Sep 12, 2024

Question 16 of 44 2 Points During 2020, USAco a domestic corporation, had $500 million of gross receipts and $400 million of deductible business expenses.

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Question 16 of 44 2 Points During 2020, USAco a domestic corporation, had $500 million of gross receipts and $400 million of deductible business expenses. Included in the business expenses was a $50 million royalty payment and a $150 million payment for services (which included a markup). Both payments were to a related foreign person and were not subject to any US withholding tax. Assuming a US tax rate of 21%, what is USAco's Base Erosion Anti-Abuse Tax ("BEAT") liability: A. $0. B. $4 million. C. $9 million. D. $21 million. Reset Selection Question 17 of 44 2 Points USAco, a domestic corporation, manufactures consumer goods for sale in the US, Belgium and Norway. Norwegian and Belgian sales are made through BELCO, a wholly owned Belgian subsidiary. BELCO, which performs no real functions with respect to the manufacture or sale of USAco's products generates $200,000 of gross profit from sales to Norwegian customers and $100,000 of gross profit from sales to Belgian customers. What is the amount of BELco's foreign base company sales income? A. $0 B. $100,000 C. $200,000 D. $300,000 Reset Selection Question 18 of 44 2 Points Piperco, a domestic corporation, owns 100% of Scoutco, a country F corporation. During 2020 (its first year of operations), Scoutco earns $200,000 of income, pays $50,000 of country F income taxes, and distributes a dividend of $150,000 to PiperCo. Piperco's deemed foreign income taxes paid is: A. $50,000. B. $37,500. C. $12,500. D. $0. Reset Selection Question 19 of 44 2 Points After 2017, the deemed paid foreign tax credit resulting from Subpart F income inclusion is: A. allocated between General and Passive income based on ratio of the CFC's undistributed earnings within each category to total. B. allocated between General and Passive income based on the nature of the CFC's current year income that resulted in the Subpart Finclusion. C. allocated first to Passive income with any residual amount allocated to General income. D. allocated exclusively to General income. Reset Selection Question 20 of 44 2 Points Effective for distributions received after December 31, 2017, a domestic corporation that is a "US shareholder" of a "specified 10% owned foreign corporation" is allowed a dividends received deduction ("DRD"). Which of the following qualify for the DRD, when from the specified 10% owned foreign corporation? A. Cash dividends. B. "Subpart F" deemed dividends. C. "GILTI" inclusions. D. Only (a) and (c). Reset Selection Question 16 of 44 2 Points During 2020, USAco a domestic corporation, had $500 million of gross receipts and $400 million of deductible business expenses. Included in the business expenses was a $50 million royalty payment and a $150 million payment for services (which included a markup). Both payments were to a related foreign person and were not subject to any US withholding tax. Assuming a US tax rate of 21%, what is USAco's Base Erosion Anti-Abuse Tax ("BEAT") liability: A. $0. B. $4 million. C. $9 million. D. $21 million. Reset Selection Question 17 of 44 2 Points USAco, a domestic corporation, manufactures consumer goods for sale in the US, Belgium and Norway. Norwegian and Belgian sales are made through BELCO, a wholly owned Belgian subsidiary. BELCO, which performs no real functions with respect to the manufacture or sale of USAco's products generates $200,000 of gross profit from sales to Norwegian customers and $100,000 of gross profit from sales to Belgian customers. What is the amount of BELco's foreign base company sales income? A. $0 B. $100,000 C. $200,000 D. $300,000 Reset Selection Question 18 of 44 2 Points Piperco, a domestic corporation, owns 100% of Scoutco, a country F corporation. During 2020 (its first year of operations), Scoutco earns $200,000 of income, pays $50,000 of country F income taxes, and distributes a dividend of $150,000 to PiperCo. Piperco's deemed foreign income taxes paid is: A. $50,000. B. $37,500. C. $12,500. D. $0. Reset Selection Question 19 of 44 2 Points After 2017, the deemed paid foreign tax credit resulting from Subpart F income inclusion is: A. allocated between General and Passive income based on ratio of the CFC's undistributed earnings within each category to total. B. allocated between General and Passive income based on the nature of the CFC's current year income that resulted in the Subpart Finclusion. C. allocated first to Passive income with any residual amount allocated to General income. D. allocated exclusively to General income. Reset Selection Question 20 of 44 2 Points Effective for distributions received after December 31, 2017, a domestic corporation that is a "US shareholder" of a "specified 10% owned foreign corporation" is allowed a dividends received deduction ("DRD"). Which of the following qualify for the DRD, when from the specified 10% owned foreign corporation? A. Cash dividends. B. "Subpart F" deemed dividends. C. "GILTI" inclusions. D. Only (a) and (c). Reset Selection