Lefty Inc. sells its products to customers residing in Country X and Country Y. Both foreign jurisdictions have a 20 percent corporate income tax. This year, Lefty made more than $30 million of sales in both Country X and Country Y. However, it paid income tax only to Country X. What factors could account for this result?

Hi, can you explain how does this aspect affects the U.S economy? Tax rates. The new law imposes a new tax rate structure with seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate was reduced from 39.6% to 37% and applies to taxable income above $500,000 for single taxpayers, and $600,000 for married couples filing jointly. The rates applicable to net capital gains and qualified dividends were not changed. The “kiddie tax” rules were simplified. The net unearned income of a child subject to the rules will be taxed at the capital gain and ordinary income rates that apply to trusts and estates. Thus, the child’s tax is unaffected by the parent’s tax situation or the unearned income of any siblings.

Emma, a U.S. resident, received the following income items for the current tax year. Identify the sourcing of each item as either U.S. or foreign. $10,000 dividend from International Consolidated, Inc., a foreign corporation that reported gross income of $4,000,000 effectively connected with the con- duct of a U.S. trade or business for the immediately preceding three tax years. International’s total gross income for the same period was $12,000,000. $5,000 interest on Warren Corporation bonds. Warren is a U.S. corporation that derived $6,000,000 of its gross income for the immediately preceding three tax years from operation of an active foreign business. Warren’s total gross income for this same period was $7,200,000.

Which of the following are includible in gross income? A) Dividends from a corporation that has no earnings and profits OB) Stock Dividends where the taxpayer receives only stock C) $70,000 in wages earned by a US Citizen in Singapore when the taxpayer was present in Singapore the entire calendar year D) Manufacturer of Hot-tub Spas allows management employees to purchase hot-tubs at only 5% over cost. The Spas are sold to dealers at 20% over cost. E) A CPA firm provides free tax-preparation services to all its employees OF) All are excludible

SkiCo, a Maine corporation, operates a branch in Peru selling equipment to persons planning to ski in the Andes mountain range. Peru levies an income tax on Peruvian companies equal to 25 percent of net income, with respect to foreign corporations such as SkiCo that operate in Peru, the government does not impose an income tax, but does impose a "foreign-company sales tax" equal to eight percent of the foreign corporation's Peruvian sales revenue. During the year, SkiCo's branch has sales of $200,000, expenses of $150,000 and pays a foreign-company sales tax of $16,000. If SkiCo were a Peruvian company, it would have paid Peruvian income tax of $12,500. (a) Is the foreign company sales tax creditable under §901 or §903? (b) Assume that SkiCo is required to pay both the $16,000 foreign-company sales tax and $12,500 Peruvian income tax on its branch operations. Is either type of Peruvian tax creditable under §901 or §903?

Birdcallington Ltd. is a CCPC that earns $200,000 in active taxable income in 2014, all of which is earned within Canada. Calculate their taxes owing assuming that no corporations are associated with them and provincial taxes are 8% on all forms of income. (ensure you use the long form method - including showing the small business deduction, generate rate reduction, etc. if relevant).

Federal income taxes have a significant effect on businesses and investors, and affect the personal decisions of every taxpayer in the United States. If we consider that the tax rates of corporations and individuals can reach up to 37% of contributions, certainly, all transactions have their tax impact. Argument about Internal Revenue Services of USA. Do you think the tax filing requirements that the IRS demands of taxpayers is fair? Why?

Which of the following statements concerning income taxes in Canada is not true? a) Income taxes must often be estimated based on prior years tax returns. b) Income taxes are usually paid through instalment payments throughout the year. c) The deadline for filing a corporate tax return and payment of any outstanding. Taxes is 6 months after the company’s year-end. d) Multinational companies located in Canada may be required to pay tax in Canada.

Richard has $30,000 of income from a country that imposes a 40-percent income tax and $30,000 of income from a country that imposes a 34 percent income tax. In addition to the foreign income, he has taxable income from US sources of $120,000 and a US tax liability, before credits, of $45,575. The amount of Richard’s foreign tax credit is:

According to the course text, the United States has employed a worldwide system of taxation for the past 100 years. The Tax Cuts and Jobs Act (TCJA) upended this system. Imagine you are an international tax consultant advising a client on the impact of P.L. 115-97, the law known as the Tax Cuts and Jobs Act, on the taxation of a controlled foreign corporation (CFC). Analyze two changes to CFCs and advise your client on the actions necessary to reduce current and future tax liability as a result of these charges.