Question

Emma, a U.S. resident, received the following income items for the current tax year. Identify the source of each income item as either U.S. or foreign.
a. $600 interest from a savings account at a Florida bank.
b. $5,000 dividend from U.S. Flower Company, a U.S. corporation that operates solely in the eastern United States.
c. $7,000 dividend from Stern Corporation, a U.S. corporation that had total gross income of $4 million from the active conduct of a foreign trade or business for the immediately preceding three tax years. Stern's total gross income for the same period was $5 million.
d. $10,000 dividend from International Consolidated, Inc., a foreign corporation that had gross income of $4 million effectively connected with the conduct of a U.S. trade or business for the immediately preceding three tax years. International's total gross income for the same period was $12 million.
e. $5,000 interest on Warren Corporation bonds. Warren is a U.S. corporation that derived $6 million of its gross income for the immediately preceding three tax years from operation of an active foreign business. Warren's total gross income for this same period was $7.2 million.


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  • CreatedSeptember 09, 2015
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