Warwick, Inc., a U.S. corporation, owns 100% of NewGrass, Ltd., a foreign corporation. NewGrass earns only general limitation income. During the current year, New Grass paid Warwick a $10,000 dividend. The deemed-paid foreign tax credit associated with this dividend is $3,000. The foreign jurisdiction requires a withholding tax of 10%, so Warwick received only $9,000 in cash as a result of the dividend. What is Warwick's total U.S. gross income reported as a result of the cash dividend?
Answer to relevant QuestionsA state can tax only its resident individuals and the corporations and partnerships that are organized in-state. Continue to consider the case of the taxpayer in Problem. Is it acceptable to you if the taxpayer purposely shifts its sales force among the states to reduce its tax liabilities? Hernandez, which has been an S corporation since inception, is subject to tax in States Y and Z. On Schedule K of its Federal Form 1120S, Hernandez reported ordinary income of $500,000 from its business, taxable interest ...Charles has a tentative general business credit of $42,000 for the current year. His net regular tax liability before the general business credit is $107,000, and his tentative minimum tax is $88,000. Compute Charles’s ...Pheasant, Inc., is going to be subject to the AMT in 2014. The corporation owns an investment building and is considering disposing of it and investing in other realty. Based on an appraisal of the building's value, the ...
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