LO.3, 6 Determine whether the source of income in each of the following situations is U.S. or foreign.

a. Development, Inc., a U.S. corporation, earns $400,000 in royalty income from Far East, Ltd., a foreign corporation, for the use of several patented processes in Far East’s manufacturing business located in Singapore.

b. Marion, an NRA, is an employee of a foreign corporation. During the tax year, she spends 75 days in the United States purchasing cloth for her employer, a clothing manufacturer. Her yearly salary is $150,000 (translated to U.S. dollars). Marion spends a total of 250 days working during the year. Her employer has no other business contacts with the United States.

c. Jacques, an NRA, sells an apartment building to Julie, a U.S. resident. The building is located in Denver. The closing takes place in Jacques’s country of residence.

d. A domestic corporation sells depreciable personal property that it has been using in its foreign branch operations. The property sells for $180,000, has a tax basis of

$75,000, and has been depreciated for tax purposes to the extent of $77,000. The property is located in a foreign country but is sold to another domestic corporation.

The sales transaction takes place in the United States.