Representative Smith also asks that you briefly advise him on the following: What is meant by...

Representative Smith also asks that you briefly advise him on the following:

What is meant by the subpart F rules? Why are they part of the Internal Revenue Code?

What is a CFC? What are the requirements for when a corporation is a CFC?

Solutions

Expert Solution

The earnings of foreign corporations generally are not taxed in the U.S. until the foreign corporation repatriates its earnings through the distribution of dividends. This is known as the concept of “deferral” (i.e., U.S. taxation is deferred until repatriation). Subpart F income is one of these exceptions to deferral.Subpart F income only applies to Controlled Foreign Corporations (CFC's).

Internal Revenue Code gives rules for the taxation of income and since dividend from foreing sources are part of Income, the rules governing them would also be part of the same rules

A CFC, very generally, is defined as a foreign corporation in which U.S. persons own more than 50 percent of the corporation's stock (measured by vote or value). Stock ownership includes direct ownership as well as stock owned indirectly or constructively.

A corporation is CFC when the requirement of more than 50% of company stock is met

Hope this helps, please mark the answer as helpful it it does. thanks

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

f you are advising a new client to open a new business, would you advise him...

f you are advising a new client to open a new business, would you advise him to form a corporation or a single proprietorship as a small business? Explain.

Please advise the following people what is the best source of financing. Also, explain the strengths...

Please advise the following people what is the best source of financing. Also, explain the strengths and weaknesses of the borrower’s ability to get loan based on 5 C’s of credit: -Mary has been in the construction business for 3 years. The business has averaged $120,000 in profits each year. She is seeking $250,000 to purchase new equipment. Her credit score is 650. She also has a house valued at $350,000 with outstanding mortgage of $200,000. Mary over 20 years...

Describe what Adam Smith meant by the “invisible hand.” Smith first used this metaphor in the...

Describe what Adam Smith meant by the “invisible hand.” Smith first used this metaphor in the context of how capitalists make decisions to invest in the most profitable activities. Why do you think many economists think this metaphor is very useful to explain the mechanism underlying a presumed compatibility between selfish interests and a successful social provisioning in capitalist economies? Do you think the fact that Smith used the words “invisible hand” very sporadically (only three times) in his work...

What is meant by TQM? What is meant by Six Sigma? Briefly discuss the importance of...

What is meant by TQM? What is meant by Six Sigma? Briefly discuss the importance of each of these to an enterprise? Identify a company that has taken advantage of Six Sigma and describe how it has utilized this to its advantage.

Bob is your clients and you advise him in his portfolio selections and investment decisions. According...

Bob is your clients and you advise him in his portfolio selections and investment decisions. According to your analysis, Bob has a degree of risk aversion of 3.1. The risk-free rate is currently 2%, the expected return on the market portfolio is 8.7%, and the volatility of the market portfolio is 19%. Advise Bob on his optimal capital allocation by giving the weight (in percentage) to put in the risky market portfolio. {Give your answer as a percentage with 2...

An investor is considering investing into a mutual fund. Before taking his decision you advise him...

An investor is considering investing into a mutual fund. Before taking his decision you advise him to not only take into account returns but also fees charged by the mutual fund. a) For each of the following options, calculate the amount available after 20 years assuming that the investor reinvests all distributions. All funds considered generate a 10% annual return throughout the period and the amount invested annually is always $3000 Option 1: The fund charges no fees on entry...

Ms. Beach has asked you to advise him on the long-term debt-paying ability of Aroshell Company....

Ms. Beach has asked you to advise him on the long-term debt-paying ability of Aroshell Company. She provides you with the following ratios: 2016 2015 2014 Times interest earned 8.2 7.0 4.5 Debt ratio 30% 29% 30% Debt to tangible net worth 70% 71% 71% a. Give the implications and the limitations of each item separately and then the collective influence that could be drawn from them about Aroshell Company's long-term debt position. b. What warnings should you offer...

In your own words, briefly explain what is meant by Social Psychology. If you were to...

In your own words, briefly explain what is meant by Social Psychology. If you were to research any question in the field of Social Psychology, what question would you seek to answer, and how might this differ from the questions asked by a related field, like Sociology or Personality Psychology? What research methods would you use to address your question? Explain why you chose this method and discuss ethical concerns associated with using this method. Support your answer with scholarly...

What is meant by an electric dipole? Also explain its moment.

(a) Briefly describe what is meant by the word cryptography. (b) Briefly describe the Vigenere cipher,...

(a) Briefly describe what is meant by the word cryptography. (b) Briefly describe the Vigenere cipher, including a discussion of the encryption and decryption processes. (c) Describe what is meant by a ‘Feistel Cipher’. (d) DES includes S-boxes as part of its encryption and decryption steps. Each of eight S-boxes is a fixed 4 × 16 array, whose entries come from the integers 0, 1, . . . , 15. Describe in detail how DES transforms a 48-bit string into...

Subjects