1) Precision S.A., an Islandian corporation, is engaged in a golf club business in Islandia and the United States. The United States business is conducted through a foreign corporation. During each of the preceding five years, 35% of Precision’s gross income was effectively connected with the United States business.

If Precision pays a dividend of $1000 to its sole shareholder, an Islandian holding company, how much of this is US source income?

2) A citizen of the US goes to Egypt as a student. As per Article 23 of the US treaty, there are many tax benefits seemingly available to this person. Explain how, or if, a savings clause in the treaty affects these benefits.

Answer rating: 100% (QA)

Question One Us source Income Us source income will be 35 of Precision SA total income 10000 0353500 ... View the full answer