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Exam 16: Multi-Juris-Dictional Taxation

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Question 71

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Dividends received from a domestic corporation are totally sourced to the U.S.:

A) If the corporation earns at least 80% of its gross income over the immediately preceding three tax years from the active conduct of a U.S.trade or business.
B) If the corporation earns at least 25% of its gross income over the immediately preceding three tax years from the active conduct of a U.S.trade or business.
C) Unless the corporation earns at least 80% of its gross income over the immediately preceding three tax years from the active conduct of a foreign trade or business.
D) Unless the corporation earns at least 25% of its gross income over the immediately preceding three tax years from the active conduct of a foreign trade or business.
E) In all of the above cases.

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Question 72

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The "residence of seller" rule is used in determining the sourcing of all gross income and deductions of a U.S.multinational business.

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Question 73

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With respect to income generated by non-U.S.persons, does the U.S.apply a "worldwide" or a "territorial" approach.Be specific.

Compost Corporation has finished its computation of Federal taxable income.In State Q, the derivation of state corporate taxable income starts with the Federal amount and makes a number of modifications.List at least five such modifications that Compost is likely to encounter.In this regard, follow the general UDITPA rules, and list both addition and subtraction modifications.

In international taxation, we discuss income sourcing rules and the permanent establishment doctrine.In multistate taxation, an analogous term might be the "ultimate destination concept." Define this term, and identify at least two of the most important exceptions to the general rule.

Which of the following statements best describes the primary purpose of the Subpart F income provisions?

Typically, sales/use taxes constitute about 20 percent of a state's annual tax collections.

A unitary business applies a combined apportionment formula, including data from operations of all of the affiliates.

All of the U.S.states have adopted a tax based on the net taxable income of corporations.

Nico lives in California.She was born in Peru but holds a green card.Nico is a nonresident alien (NRA).