Velocity, Inc., a foreign corporation, operates a U.S. branch. It reports the following tax results and other
Question:
Velocity, Inc., a foreign corporation, operates a U.S. branch. It reports the following tax results and other information for the year.
Pretax earnings effectively connected with a U.S. trade or business ……….. $900,000
U.S. corporate tax (at 34%) ………………………………………………… 306,000
Remittance to home office ………………………………………………… 400,000
Increase in U.S. net equity ………………………………………………… 194,000
a. Compute Velocity’s dividend equivalent amount for the tax year.
b. Determine Velocity’s liability for the branch profits tax for the year.
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts
ISBN: 1389
41st Edition
Authors: William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
Question Posted: