Question

True or False a.) A U.S. corporation’s gross profit from sale of inventory it manufactures in the United States will be treated entirely as U.S. source income regardless of where title to the inventory passes to the buyer. b.) One of the goals of an income tax treaty between the United States and other countries is to reduce the withholding taxes imposed on cross-border payments such as dividends, interest, and royalties. c.) A U.S. corporation owning 100 percent of a Dutch corporation will be eligible for a foreign tax credit for withholding taxes imposed on dividends received from the corporation. d.) Subpart F of the Internal Revenue Code was enacted to prevent the deferral of U.S. taxation on certain types of passive income earned by foreign corporations controlled by U.S. shareholders.

Answer 1

a)	TRUE	The title passage rule is not applicable for the income from the sale of inventories manufactured in the United States
b)	FALSE	The goals of an income tax treaty between the United States and other countries is to reduce double taxation, eliminate tax evasion etc.
c)	TRUE	The U.S. corporation is eligible for foreign tax credit for withholding taxes imposed on qualified dividends
d)	TRUE	Subpart F of the Internal Revenue Code was enacted to prevent the deferral of U.S. taxation