Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: Comet Sub 1 Sub 2 Foreign Source Income 0 $3,660,000 4,800,000 U.S. Source Foreign Income Income Tax Paid 0 $ 772,500 172,000 442,500 Required: a. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. b. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns? Required A Required B $ 380,000 1,250,000 Complete this question by entering your answers in the tabs below. Consolidated income tax If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. Note: Do not round any intermediate division. Required A Required B >

Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: Comet Sub 1 Sub 2 Foreign Source Income 0 $3,660,000 4,800,000 U.S. Source Foreign Income Income Tax Paid 0 $ 772,500 172,000 442,500 Required: a. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. b. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns? Required A Required B $ 380,000 1,250,000 Complete this question by entering your answers in the tabs below. Consolidated income tax If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. Note: Do not round any intermediate division. Required A Required B >

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter17: Business Tax Credits And The Alternative Minimum Tax

Section: Chapter Questions

Problem 17P

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Comet operates solely within the United States. It owns two subsidiaries conducting business in the United States and several foreign countries. Both subsidiaries are U.S. corporations. This year, the three corporations report the following: Comet Sub 1 Sub 2 Foreign Source Income 0 $ 3,500,000 4,700,000 U.S. Source Foreign Income Tax Paid 0 Required A Required B Income $ 600,000 150,000 410,000 Required: a. If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. b. What is the aggregate tax of the group if the three corporations file separate U.S. tax returns? $ 350,000 1,175,000 Complete this question by entering your answers in the tabs below. Consolidated income tax If Comet and its two subsidiaries file a consolidated U.S. tax return, compute consolidated income tax. Note: Do not round any intermediate calculations.
Worldwide United Corporation, a U.S. taxpayer, manufactures and sells products through a network of foreign branches and foreign subsidiaries. Foreign subsidiaries are all controlled foreign corporations. Relevant information for these entities for the current fiscal year appears in the following table: Entity A B C D . ● ● Country . Bermuda |Hong Kong Ireland Malaysia Legal Form Corporation Corporation Corporation Branch Activity Sales Sales Investment Manufacturing Income Before Tax $8,000,000 $10,000,000 $2,000,000 $10,000,000 Income Tax Rate 0% 10% 12.5% 24% Dividend Withholding Tax Rate 0% 0% 0% 0% Net Dividend Received by Parent $8,000,000 Additional information: Entity A purchases finished goods from Entity D and sells them to other markets. 99% of A's income is from sales to foreign customers. Entity B purchases finished goods from Entity D and sells them to other markets. 60% of B's income is from sales to foreign customers. Entity C makes passive investments in stocks and…
Axtell Corporation has the following taxable income: U.S. source income Foreign source income: Country A Country B Country C Taxable income $ 1,620,000 550,000 2,000,000 2,900,000 $ 7,070,000 Axtell paid $600,000 income tax to Country B and $1.3 million income tax to Country C. Country A does not have a corporate income tax. Required: Compute Axtell's U.S. income tax, assuming the foreign source income does not qualify as FDII. Note: Do not round any intermediate calculations. Enter your answer in dollars and not in millions of dollars. U.S. income tax
U.S. International Corporation (USIC), a U.S. taxpayer, has investments in Foreign Entities A-G. Relevant Information for these entities for the current fiscal year appears in the following table: Entity Country % Owned Activity Income before tax ($ millions) Income Tax Rate Dividend Withholding tax Rate Net Amount Received by Parent ($ millions) USIC United States 35.00% Argentina Brazil Canada Hong Kong 100% Liechtenstein 100% A B C D E F G 100% 100% 100% 51% Japan New Zealand 60% Manufacturing $10.00 Manufacturing $1.00 Manufacturing $2.00 Manufacturing $3.00 Investment $2.00 Distribution $3.00 Manufacturing $2.00 $4.00 Banking 35.00% 34.00% 26.00% 16.50% 10.00% 38.00% 28.00% 0% 0% 5% 0% 4% 5% 5% $0.20 $2.50 $1.00 $1.50 S- $0.50 $1.00 Additional Information 1. USIC's $10 million income before tax is derived from the production and sale of products in the United States. 2. Each entity is legally incorporated in its host country other than Entity A, which is registered with the…
Many Mountains, Incorporated is a U.S. multinational corporation. This year, it had the following income. U.S. source income Foreign source income: Country X Country Y Total Multiple Choice O Many Mountains paid $15,000 income tax to Country X and $28,500 income tax to Country Y. Assume Many Mountains' foreign source income does not qualify as foreign- derived intangible income. Compute Many Mountains' allowable foreign tax credit. $15,000 $18.500 $33.500 $ 65,000 105,000 $35,700 $ 580,000 170,000 $750,000
Zenon, Incorporated has the following taxable income: U.S. source income Foreign source income Taxable income $ 1,900,000 240,000 $ 2,140,000 Required: Zenon paid $33,000 foreign income tax. Compute its U.S. income tax, if Zenon conducted its foreign operations through a foreign subsidiary that made no shareholder distributions during the current year and had no GILTI or subpart F income. U.S. income tax
ZAX, resident foreign corporation, reports the following: Philippines P15,000,000 1,500,000 Abroad Gross income from business Dividends from ABC domestic corporation Dividends form DEF foreign corporation Interest on long-term deposits Rentals on properties P25,000,000 3,000,000 50,000 900,000 25,000 2,000,000 Total P17,450,000 P30,025,000 Compute the gross income of ZAX subject to regular income tax in the Philippines.
Chapeau Company, a U.S. corporation, operates through a branch in Champagnia. The source rules used by Champagnia are identical to those used by the United States. For 2022, Chapeau has $9,600 of gross income: $5,760 from U.S. sources and $3,840 from sources within Champagnia. The $5,760 of U.S. source income and $3,360 of the foreign source income are attributable to manufacturing activities in Champagnia (foreign branch income). The remaining $480 of foreign source income is passive category interest income. Chapeau had $2,400 of expenses other than taxes, all of which are allocated directly to manufacturing income ($960 of which is apportioned to foreign sources). Chapeau paid $568 of income taxes to Champagnia on its manufacturing income. The interest income was subject to a 10 percent withholding tax of $48. Compute Chapeau's total allowable foreign tax credit in 2022. Note: Do not round any division. Round other intermediate computations to the nearest whole dollar amount. Total…
2. Summer Corporation’s business is international in scope and is subject to income taxes in a foreign country. Summer’s earnings and income taxes paid in Brazil $1,900,000 and $595,000 respectively. Summer’s earnings in Ireland were $1,000,000, where income tax of $100,000 was paid. If Summer Corporation’s worldwide income subject to taxation in the United States is $5,000,000 and the U.S. income tax due prior to the foreign tax credit is $1,050,000. Explain the purpose of the foreign tax credit and describe how it is computed. Compute the allowable foreign tax credit, and the US tax liability after the credit. If, instead, the total foreign income taxes paid were $550,000 (450,000 in Brazil plus 100,000 in Ireland), compute the allowable foreign tax credit.
The subsidiary of a U.S. corporation located in Country Y generated income of $1,000,000 on which it paid $200,000 in taxes to Country Y. The subsidiary paid a dividend to the U.S. parent of $150,000. How much tax is currently owed to the U.S. government if the federal tax rate is 35%? Multiple Choice $52,500 $0 $35,625 $32,500
"Easy lang ito" Corporation provided the following data for the calendar year ending December 31, 2012. ($1=P50) (See image) If it is a resident foreign corporation, its income tax is * Philippines P4,000,000 P2,500,000 Abroad $40,000 $15,000 $3,000 Gross Income Deductions Income tax paid a. P730,000 b. P450,000 c. P480,000 d. P525,000
1. ForCo, a corporation that is incorporated in a foreign country that does not have a treaty with the United States, plans to conduct manufacturing, marketing, and sales operations in the United States. These U.S. operations produce $5 million of earnings & profits in Year 1. Assume further that the U.S. operations will have a net worth of $17 million at the beginning of Year 1 and $20 million at the end of Year 1. During Year 2, the U.S. branch does not produce any earnings & profits and its net worth is $20 million at the beginning of the year and $10 million at the end of the year. For branch profits tax purposes in Year 1, the dividend equivalent amount (“DEA”) for the U.S. branch is as follows: a. $1.5 million. b. $2.0 million c. $10 million. $20 million. d. $25 million. 2. For branch profits tax purposes in Year 2, the DEA for the U.S. branch is as follows: a. $2 million. b. $3 million. c. $10 million. d. $20 million. e. $25 million.…