61) Which of the following is required in order for a transaction to be considered a corporate inversion?
A) A foreign corporation acquires substantially all of the assets of a U.S. corporation.
B) Former shareholders of the U.S. corporation own 80% or more of the stock in the foreign corporation by reason of their U.S. stock ownership.
C) The former U.S. company and its affiliates do not conduct substantial business in the foreign country of incorporation.
D) All of the above are required.
62) What are the consequences of classification as a corporate inversion?
A) The foreign corporation will be treated as if it is a U.S. corporation.
B) Foreign tax credits will be disallowed on all future earnings.
C) The corporation will be subject to a flat 35% tax rate.
D) If more than half of the shareholders of the new company are the same as the former company, the corporation is considered a U.S. corporation.
63) A taxpayer may make the election to either deduct or take a credit for foreign income taxes
B) once every five years.
C) only once, and the election applies to all future tax years.
D) No election is available.
64) Which of the following statements is incorrect?
A) A domestic subsidiary's earnings are taxed in the year earned.
B) A foreign corporation's (less than 50% ownership) are not taxed until repatriated.
C) All of a controlled foreign corporation's earnings are taxed as earned.
D) U.S. taxpayers with a foreign branch can reduce part or all of their U.S. taxes by the foreign tax credit.
65) Identify which of the following statements is true.
A) When a cash-basis taxpayer elects to take a credit for accrued foreign income taxes, certain other income and expense items must likewise be accrued.
B) The taxpayer may revoke an election to exclude foreign-source earned income if a loss is incurred from foreign employment.
C) A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident alien sometime during the tax year and both spouses consent.
D) All of the above are true.
66) A nonresident alien cannot
A) elect to be treated as a resident alien.
B) elect to be treated as a resident alien before satisfying the substantial presence test for the calendar year following the election year if unmarried.
C) make an irrevocable election to be treated as a resident alien after satisfying the substantial presence test.
D) make an election to be treated as a resident alien if married to a resident alien.
67) In accounting for multinational corporations,
A) SFAS 109 requires companies to include taxes on repatriation of foreign earnings as a deferred tax asset.
B) the deferral of foreign earnings is a temporary difference.
C) SFAS 109 allows the parent to exclude taxes on repatriated foreign earnings if they will not be repatriated in the foreseeable future.
D) a corporation with excess foreign tax credits will record a deferred tax liability.