Question 21 of 44 2 Points U.S. persons Larry, Curly, and Moe each own 15 percent of a foreign corporation, while U.S. persons Mary and Jane each own 5 percent of the foreign corporation (all unrelated persons). Unrelated foreign persons owns the remaining 45 percent of the foreign corporation. The foreign corporation is: A. a controlled foreign corporation. B. not a controlled foreign corporation. C. a de-facto US corporation. D. a passive foreign investment company ("PFIC"). Reset Selection Question 23 of 44 2 Points Tom, a US citizen lived and worked in the US for the first 3 months of the current year, but transferred at the beginning of the fourth month to a foreign office for the remainder of the year. From April through December, he worked 30 days in the US and 150 days in foreign countries. Tom received an annual salary of $100,000. What is the foreign-sourced component of Tom's $100,000 salary? A. $0 B. $41,096 C. $62,500 D. $75,000 Reset Selection Question 25 of 44 2 Points In year 1, Tom (a US citizen) organizes FORco, a wholly owned foreign corporation, and contributes $10 million of cash to FORco in exchange for 100% of its stock. During year 1, FORCO derives $2 million of Subpart Fincome (net of foreign income taxes and other deductions), which is taxed to Tom in year 1 as a Subpart F inclusion. In year 2, Tom sells FORco for $13 million. How much income must Tom include in taxable income in year 2 as a result of the sale of FORco? O A. $0 B. $1,000,000 C. $3,000,000 D. $13,000,000 Reset Selection Question 26 of 44 2 Points USAco, a domestic corporation, is a wholly-owned subsidiary of FORco, a foreign corporation. During the current year, USACO distributes a dividend of $100,000 to FORco and makes an interest payment of $100,000 to FORco. Under the US Model Treaty, USACO must withhold total U.S. taxes of: A. $5,000. B. $10,000. C. $35,000 D. $60,000. Reset Selection Question 27 of 44 2 Points FORCo wants to open a sales office in the United States. Because FORCo does not want to be subject to any withholding tax on dividends, FORco does not form a U.S. subsidiary, but instead operates in the U.S. as a branch. If the U.S. sales office is profitable and distributes cash, FORco may be subject to: A. a Subpart Finclusion. B. the branch profits tax. C. the earnings stripping tax. D. a section 267 limitation. Reset Selection