The shares of Volkswagen trade on the Frankfurt stock exchange A U S investor purchased 1,000 shares of Volkswagen at 56 91 each, when the exchange rate was $ 0 9790 0 9795 Three months later, the investor received a dividend of 0 50 per share, and the investor decided to sell the shares at the the...

a Net dividend in euros after deducting withholding tax 050 per share 1000 shares 1 015 4 ...

The shares of Volkswagen trade on the Frankfurt stock exchange. A U.S. investor purchased 1,000 shares of

Question:

The shares of Volkswagen trade on the Frankfurt stock exchange. A U.S. investor purchased 1,000 shares of Volkswagen at €56.91 each, when the was €:$ = 0.9790-0.9795. Three months later, the investor received a of €0.50 per share, and the investor decided to sell the shares at the then prevailing price of €61.10 per share. The was €:$ = 0.9810-0.9815. The withholding tax rate in Germany is 15% and there is a tax treaty between the United States and Germany to avoid double taxation.
a. How much did the U.S. investor receive in dividends in dollars, net of tax?
b. What were the capital gains from the purchase and sale of Volkswagen shares?
c. How would the income be declared by the investor on a U.S. tax return, and what tax credit would he receive?
Dividend
A 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... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...