What was the Supreme Court's holding in National Bellas Hess?

A) An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence.

B) Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers.

C) Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax.

D) Defined solicitation for purposes of Public Law 86-272. 26.

What was the Supreme Court's holding in Quill?

A) An out-of-state mail-order company did not have a sales tax collection responsibility because it lacked physical presence.

B) Reaffirmed that an out-of-state business must have physical presence in the state before the state may require the business to collect sales tax from in-state customers.

C) Spelled out four criteria for determining whether states may subject nondomiciliary companies to an income tax. D) Defined solicitation for purposes of Public Law 86-272.

Horton Corporation is a 100 percent owned Canadian subsidiary of Cruller Corporation, a U.S. corporation. During the current year, Horton paid a dividend of C$600,000 to Cruller. The dividend was subject to a withholding tax of C$30,000. Assume an exchange rate of C$1 = $1. Cruller reported U.S. source taxable income of $2,000,000 before considering the dividend received from Horton Corporation. Compute the tax consequences to Cruller as a result of this dividend.

A) Taxable income of $2,600,000, net U.S. tax of $516,000, and FTC carryover of $0

B) Taxable income of $2,600,000, net U.S. tax of $546,000, and FTC carryover of $30,000

C) Taxable income of $2,000,000, net U.S. tax of $390,000, and FTC carryover of $0

D) Taxable income of $2,000,000, net U.S. tax of $420,000, and FTC carryover of $0

Boca Corporation, a U.S. corporation, reported U.S. taxable income of $1,000,000 in 2018. Boca also received a dividend of $100,000 from the corporation's 100 percent owned subsidiary in Italy. The Italian government imposed a withholding tax of $5,000 on the dividend. Compute Boca Corporation's net U.S. tax liability for 2018.

A) $231,000

B) $227,000

C) $210,000

D) $205,000

Which of the following tax benefits does not arise when a U.S. corporation forms a corporation in Ireland through which to earn business profits in Ireland?

A) Potential exemption of U.S. tax on income earned by the corporation.

B) Treaty benefits on cross border payments between the Irish corporation and the U.S. corporation.

C) Use of transfer pricing to shift income between the United States and Ireland.

D) Flow-through of losses from the Irish corporation to the tax return of the U.S. corporation.