Question

Determine whether the source of income in each of the following situations is U.S. or foreign.
a. USCo sells depreciable personal property that it has been using in its foreign branch operations. The property sells for $180,000, has a tax basis of $75,000, and has been depreciated for tax purposes to the extent of $90,000. The property is located in a foreign country but is sold to another domestic corporation.
The sales transaction takes place in the United States.
b. Jacques, an NRA, sells an apartment building to Julie, a U.S. resident, at a $200,000 gain. The building is located in Denver. The closing takes place in Jacques's country of residence.
c. Carla, an NRA, is an employee of a foreign corporation. During the tax year, she spends 80 days in the United States purchasing cloth for her employer, a clothing manufacturer. Her yearly salary is $150,000 (translated to U.S. dollars).
Carla spends a total of 200 days working during the year. Her employer has no other business contacts with the United States.
d. Development, Inc., a U.S. corporation, earns $1,100,000 in royalty income from Far East, Ltd., a foreign corporation, for the use of several patented processes in Far East's manufacturing business located in Singapore.


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  • CreatedSeptember 09, 2015
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