Question

In: Accounting

Maria, a resident of Mexico City, Mexico, formed MZE Corp. in Mexico under

 Maria, a resident of Mexico City, Mexico, formed MZE Corp. in Mexico under Mexican law but planned to do business in the United States. Is MZE eligible to elect S corporation status in the United States? Explain.

Solutions

Expert Solution

No, MZE Corp. is not eligible to elect S corporation status in the United States. S corporations are formed under state or federal law in the United States. 

To be eligible to elect S corporation status, a corporation must be a domestic corporation as defined in section 7701(a)(4) of the Internal Revenue Code. 

A domestic corporation is a corporation that was created or organized in the United States or under the laws of the United States, any state, the District of Columbia, the possessions of the United States, or any territory or insular possession subject to the jurisdiction of the United States. 

 

 

Therefore, because MZE Corp. was created in Mexico, it is not eligible to elect S corporation status in the United States.

Nabeel answered 2 years ago
Next > < Previous

Related Solutions

Maria resides in San Antonio, Texas. She formed MZE Corporation under the state laws
Maria resides in San Antonio, Texas. She formed MZE Corporation under the state laws of Texas. Maria anticipates that she will conduct her business activities in both Mexico and the United States. Is MZE eligible to elect S corporation status? Explain.
Grupo Bimbo​ (Mexico).  Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies...
Grupo Bimbo​ (Mexico).  Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies in the world. On January​ 1st, when the spot exchange rate isPs10.82/$​, the company borrows $24.8 million from a New York bank for one year at 6.84% interest​ (Mexican banks had quoted 9.64% for an equivalent loan in​ pesos). During that​ year, U.S. inflation is 2.4% and Mexican inflation is 4.6%. At the end of the year the firm repays the dollar loan. a....
Grupo Bimbo​ (Mexico). Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies...
Grupo Bimbo​ (Mexico). Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies in the world. On January​ 1st, when the spot exchange rate is Ps10.80/$​, the company borrows $25.0 million from a New York bank for one year at 6.80% interest​ (Mexican banks had quoted 9.60% for an equivalent loan in​pesos). During that​ year, U.S. inflation is 2.0% and Mexican inflation is 4.0%. At the end of the year the firm repays the dollar loan. a....
CherryBerry is considering opening a location on the east side of Mexico City. The firm is...
CherryBerry is considering opening a location on the east side of Mexico City. The firm is uncertain about the success of the venture due to uncertainty about demand for its frozen yogurt products in Mexico. Opening the store would require an initial investment of $500,000. The firm estimates that there is a 60% chance that the store will be successful and generate cash flows of $200,000 per year, forever. There is a 40% chance that the store will be a...
Research department tells you that an annual income of a city resident is normally distributed with...
Research department tells you that an annual income of a city resident is normally distributed with mean (µ) $50,000 and standard deviation (σ) of $10,000. Use this information for questions 1-4. Use Table A in your book to lookup proportions for z-scores. 1. Using above information, what proportion of city residents earn below $35,700? Show work. 2. Using above information, what proportion of city resident earn above $68,400? Show work. 3. Using above information, what proportion of city resident earn...
14. Grove City Corp. On January 1, 2017, Grove City Corp. purchased a ship for $2,000,000....
14. Grove City Corp. On January 1, 2017, Grove City Corp. purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the double-declining-balance method. What was the depreciation expense for Grove City Corp. for the year ended December 31, 2018? a.$320,000 b.$0 c.$400,000 d.$160,000 16. Research and development costs are a.capitalized and amortized over the periods that will probably benefit from the research and development. b.treated as an expense when...
On January 1, 2019, MARIA, MARA, MARIZ, and MARLA formed 4M Trading Co., a partnership with...
On January 1, 2019, MARIA, MARA, MARIZ, and MARLA formed 4M Trading Co., a partnership with capital contributions as follows : MARIA, P50,000; MARA, 25,000; MARIZ, P25,000; and MARLA, P20,000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that MARIA and MARA shall receive salaries of P5,000 and P3,000, respectively. The contract also provided that MARIZ shall receive a minimum of P2,500 per annum, and MARLA a minimum of P6,000 per annum,...
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was...
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was able to obtain previous years’ demand and probability data as given in below table. She also estimates: Selling price is $10, cost is $3, and the salvage value is $1. Calculate all numbers in the payoff table. Show all work. How many shirts should be made to maximize profit? Demand = 1000, 20% Demand = 2000, 30% Demand = 3000, 30% Demand = 4000,...
The average resident of Metro City produces 630 pounds of solid waste each year, and the...
The average resident of Metro City produces 630 pounds of solid waste each year, and the standard deviation is approximately 70 pounds. Use Chebyshev's theorem to find the weight range that contains at least  of all residents' annual garbage weights. Between 420 and 840 pounds Between 560 and 700 pounds Between 490 and 770 pounds Between 350 and 910 pounds
Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies in the world....
Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies in the world. On January​ 1st, when the spot exchange rate is Ps 10.83 divided by $​, the company borrows $25.1 million from a New York bank for one year at 6.77 % interest​ (Mexican banks had quoted 9.62 % for an equivalent loan in​ pesos). During that​ year, U.S. inflation is 2.2 % and Mexican inflation is 4.7 %. At the end of the year the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT