Identify whether the corporations described below are controlled foreign corporations.Required:a. Shetland PLC, a U.K. corporation, has two classes of stock outstanding, 75 shares of class AA stock and 25 shares ofclass A stock. Each share of stock has equal voting power and value. Angus owns 35 shares of class AA stock and20 shares of class A stock. Angus is a U.S. citizen who resides in England.b. Mihai and Gina, both U.S. citizens, own 5 percent and 10 percent, respectively, of the voting stock and value ofDaVinci S.A., an Italian corporation. Mihai and Gina are also equal partners in Roma Corporation, an Italiancorporation that owns 50 percent of the DaVinci stock.c. Pierre, a U.S. citizen, owns 45 of the 100 shares outstanding in Vino S.A., a French corporation. Pierre's father, Pepe,owns 8 shares in Vino. Pepe also is a U.S. citizen. The remaining 47 shares are owned by non-U.S. individuals.Complete this question by entering your answers in the tabs below.Required Required RequiredABсShetland PLC, a U.K. corporation, has two classes of stock outstanding, 75 shares of classAA stock and 25 shares of class A stock. Each share of stock has equal voting power andvalue. Angus owns 35 shares of class AA stock and 20 shares of class A stock. Angus is aU.S. citizen who resides in England.< Required ARequired B >Show less

United States Shareholder: As defined in section 957(c), the term “United States shareholder” means,…

Answered: Identify whether the corporations…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 5DQ

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5. Five unrelated U.S. individuals own all of the shares of Popping, a corporation organized and operating fully in the country Vivace. Mariam, one of the shareholders, asks you whether the income from Popping will be taxed to her immediately as earned; she believes the entity is classified as "a controlled foreign corporation (CFC)." Explain how the Federal income tax law applies to the profits earned by Popping. Use the correct Federal income tax terminology in your comments.
Maki is a stockholder in both Agrix Corporation (domestic corporation) andAtlanta corporation (non-resident foreign corporation). During the year, Jhaeronearned P100,000 dividends from Agrix and P300,000 dividends from Atlanta.Maki is a Filipino citizen residing in the Philippines. How much of the dividendincome of Maki is subject to income tax in the Philippines?
Read each case and specify which standard was violated 1.Aziza works for a multinational investment adviser based in the USA, she has US citizenship since 2020. She lives and works as a registered investment adviser in the tiny, but wealthy, island nation. The securities laws state that no investment adviser registered and working in that country can participate in initial public offerings (IPOs) for the adviser’s personal account. Aziza, believing that as an American citizen working for a U.S.-based company she should comply only with U.S. law, has ignored this Karrambian law. In addition, Aziza believes that, as a charter holder, as long as she adheres to the Code and Standards requirement that she disclose her participation in any IPO to her employer and clients when such ownership creates a conflict of interest, she is meeting the highest ethical requirements.
Jhaeron is a stockholder in both Agrix Corporation (domestic corporation) and Atlanta corporation (non-resident foreign corporation). During the year, Jhaeron earned P100,000 dividends from Agrix and P300,000 dividends from Atlanta. Jhaeron is a Filipino citizen residing in the Philippines. How much of the dividend income of Jhaeron is subject to income tax in the Philippines?
Assume A, a "United States Person", owns 9.5% of the vote and value of X, a foreign corporation. A also owns 2% of the vote and value of Y, a foreign corporation, which, in turn, owns 25% of the vote and value of X. Is A a “United States Shareholder" of X? What are the implications of being a United States Shareholder?
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to Kl Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following chart outlines the details of the assets. Inventory Automobile Patent Customer list FMV ACB UCC $ 260,000 $ 22,500 52,000 $ 30,000 50,000 100,000 60,000 16,500 30,000 Required: $432,500 $ 142,000 $ 46,500 For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets. FMV ACB UCC Elected amount Cash Preferred Shares Inventory $ 260,000 $ 52,000 0…
Shares are not deemed property within the Philippines when a. The shares are issued by a domestic corporation. b. The shares are issued by a foreign corporation with no business situs in the Philippines. c. The shares are issued by a foreign corporation with 85% business in the Philippines. d. The shares are issued by a corporation organized under Philippine laws.
Which of the following will disqualify a corporation from electing Subchapter S status? All shareholders are U.S. citizens except for 10% who are resident aliens. The election form is signed by 80% of the shareholders. The corporation has one class of stock. The corporation has 80 shareholder
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following is the details of the assets: FMV UCC $ 230,000 115,000 10,350 46,000 АСВ $ 46,000 80,500 34,500 20,000 $ 181,000 Land Building Equipment 57,500 9,200 17,575 $ 84,275 Goodwill $ 401,350 Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets Elected Preferred FMV ACB UCC Cash amount Shares Land $ 230,000 $ 46,000 Building 115,000…
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following is the details of the assets: Land Building Equipment. Goodwill Land Building Equipment Goodwill FMV ACB $ 230,000 $ 46,000 $ 115,000 10,350 46,000 $ 401,350 $ 181,000 $ 84,275 Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets $ FMV $ 230,000 $ 115,000 10,350 46,000 401,350 80,500 34,500 20,000 ACB 46,000 80,500 $ 34,500 UCC 0…
Tia Kline, a resident of Canada, is the sole shareholder of KI Inc. She plans to transfer four assets, which she owns, to KI Inc. in exchange for cash and preferred shares of KI Inc. She wishes to receive the maximum amount in cash that she can receive and still defer the recognition of income for tax purposes on the transfer of the assets. Tia and KI Inc. will jointly make a Section 85 election for each of the assets. The following chart outlines the details of the assets. UCC FMV $ 260,000 $ 22,500 50,000 100,000 ACB 52,000 30,000 60,000 0 $ 432,500 $ 142,000 $ Inventory Automobile Patent Customer list Inventory Automobile Patent Customer list $ Required: For each of the four assets individually, state the amount that should be elected as proceeds under Section 85 of the Income Tax Act, state the amount of cash consideration, and state the value of the preferred shares Ms. Kline should accept as consideration for the assets. $ FMV 260,000 $ 22,500 50,000 100,000 432,500 $ ACB $…
Miguel is a citizen and resident of Brazil. During the current vear, Miguel never visits the UnitedStates nor does he hold a green card. However, he receives a dividend from Micro Corporation,receives interest on a bond issued by MBI Corporation, realizes a gain on the sale of ExtelCorporation stock, and realizes a gain on the sale of 1,000 acres of undeveloped land located inTexas. Micro, MBI and Extel are all corporations organized in the United States. The United States does not have an income tax treaty with brazilDescribe the U.S. tax consequences of each of the above items of income. Also, indicate how our answers would change if Miquel held a green card

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