A non-U.S. corporation investor held a real estate asset (a parcel of land) that that was purchased for $50,000,000 for 10 years and will sell it for $90,000,000. The investor gain on the sale of the asset is considered to in a business that is effectively connected to a U.S. trade or business (ECI).

a. Compute the tax on the sale assuming that the investor held the asset directly (consider both ECI and branch profits tax) __________________.

b. Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with a 15% treaty rates on dividends and assuming no plan of liquidation is made for distributions related to the sale _______________________ .

c. Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with no treaty rates on dividends and assuming a plan of liquidation is made for distributions in the year of the sale _______________________ .

Answer rating: 100% (QA)

a The tax on the sale assuming that the investor held the asset directly would be 0 for the ECI and ... View the full answer