Rodrigo Alexander is a resident and citizen of Peru and lives in Lima, Peru Based on the advice of a trusted financial planner, Rodrigo opens a brokerage account with Trading Pioneers Investment Bank in New York in order to trade in U S stocks and securities Rodrigo frequently trades stocks and securities through a brokerage account in New York In 2020, Rodrigo purchased 1,000 shares in Super Technologies Inc , a California corporation, for $100 per share In 2021, Super Technologies pays a dividend of $1 per share What is the U S tax consequence to Rodrigo on the $1,000 of dividend income received from the investment in Super Technologies The $1,000 of dividend income is subject to U S net income tax The $1,000 of dividend income is subject to gross U S withholding tax at 30 No tax because dividends are subject to the DRD No tax because the dividend is paid by a U S corporation In 2021, Rodrigo sold the 1,000 shares for $200 per share What is the U S tax consequence to Rodrigo on the sale of the shares in in Super Technologies The $100,000 of capital gain is subject to U S net income tax because the gain is from a trading business in the U S e) The $100,000 of capital gain is subject to gross U S withholding tax at 30 because the gain is from shares of a U S corporation No U S tax because the gain is qualified dividend income No U S tax because the gain is from trading a security for Rodrigos own account In 2020, Rodrigo purchased 1,000 bonds issued by Exotic Beverage Inc , a California corporation Rodrigo does not own any equity interest in Exotic Beverage In 2021, Exotic Beverage pays a interest of $25 per bond What is the U S tax consequence to Rodrigo on the $25,000 of interest income received from the bonds issued by Exotic Beverage The $25,000 of interest income is subject to U S net income tax The $25,000 of interest income is subject to gross U S withholding tax at 30 No U S tax because Rodrigo does not own any equity interest in Exotic Beverage No U S tax because the interest is not U S source Eduardo Ballios, a citizen and resident of Singapore, purchased real property in Nevada for $2 million In 2021, Eduardo sells the building for $3 1 million, but has expenses related to the sale of $100,000, for a total net gain of $1 million How is Eduardo taxed on the sale for U S tax purposes The $1 million of gain is subject to U S net income tax because the gain is from a trade or business in the U S The $1 million of gain is subject to gross U S withholding tax at 30 because the gain is from a U S real property No U S tax because paying U S tax is voluntary No U S tax because the gain is not U S source FDAP income

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 09, 2024

Rodrigo Alexander is a resident and citizen of Peru and lives in Lima, Peru. Based on the advice of a trusted financial planner, Rodrigo opens

Rodrigo Alexander is a resident and citizen of Peru and lives in Lima, Peru. Based on the advice of a trusted financial planner, Rodrigo opens a brokerage account with Trading Pioneers Investment Bank in New York in order to trade in U.S. stocks and securities.

Rodrigo frequently trades stocks and securities through a brokerage account in New York.

In 2020, Rodrigo purchased 1,000 shares in Super Technologies Inc., a California corporation, for $100 per share. In 2021, Super Technologies pays a dividend of $1 per share. What is the U.S. tax consequence to Rodrigo on the $1,000 of dividend income received from the investment in Super Technologies?
1. The $1,000 of dividend income is subject to U.S. net income tax
2. The $1,000 of dividend income is subject to gross U.S. withholding tax at 30%
3. No tax because dividends are subject to the DRD
4. No tax because the dividend is paid by a U.S. corporation

In 2021, Rodrigo sold the 1,000 shares for $200 per share. What is the U.S. tax consequence to Rodrigo on the sale of the shares in in Super Technologies?
1. The $100,000 of capital gain is subject to U.S. net income tax because the gain is from a trading business in the U.S.

e) The $100,000 of capital gain is subject to gross U.S. withholding tax at 30% because the gain is from shares of a U.S. corporation

1. No U.S. tax because the gain is qualified dividend income
2. No U.S. tax because the gain is from trading a security for Rodrigos own account
In 2020, Rodrigo purchased 1,000 bonds issued by Exotic Beverage Inc., a California corporation. Rodrigo does not own any equity interest in Exotic Beverage. In 2021, Exotic Beverage pays a interest of $25 per bond. What is the U.S. tax consequence to Rodrigo on the $25,000 of interest income received from the bonds issued by Exotic Beverage?
1. The $25,000 of interest income is subject to U.S. net income tax
2. The $25,000 of interest income is subject to gross U.S. withholding tax at 30%
3. No U.S. tax because Rodrigo does not own any equity interest in Exotic Beverage
4. No U.S. tax because the interest is not U.S. source
Eduardo Ballios, a citizen and resident of Singapore, purchased real property in Nevada for $2 million. In 2021, Eduardo sells the building for $3.1 million, but has expenses related to the sale of $100,000, for a total net gain of $1 million. How is Eduardo taxed on the sale for U.S. tax purposes?
1. The $1 million of gain is subject to U.S. net income tax because the gain is from a trade or business in the U.S.
2. The $1 million of gain is subject to gross U.S. withholding tax at 30% because the gain is from a U.S. real property
3. No U.S. tax because paying U.S. tax is voluntary
4. No U.S. tax because the gain is not U.S. source FDAP income