What are the U.S. tax consequences of Filigree’s 2003 activity?

Filigree Inc., a foreign corporation, is a wholly owned subsidiary of Gold Corporation, a U.S. corporation. Filigree’s 2003 taxable income of $1 million included $300,000 of Subpart F income. Filigree paid $270,000 of foreign income tax and made no distributions to Gold during 2003. Gold’s separate company 2003 taxable income was $2 million, all of which was U.S. source. a. What are the U.S. tax consequences of Filigree’s 2003 activity? b. Calculate Gold’s 2003 taxable income, allowable foreign tax credit, and net U.S. tax liability.

Taxation - True or False

1. As a general rule all of the liabilities of a partnership, including those assumed from a partner, are shared among the partners for purposes of determining outside basis. 2. Partnership liability is recourse to the extent that no partner has personal liability for repayment. 3. If a shareholder owns, directly or indirectly, 35 percent of the FMV of the outstanding stock of a corporation, he and the corporation are related parties. 4. The gain recognized from the sale or exchange of depreciable property by a shareholder to a related corporation is capital gain. 5. Defined benefit plans do NOT provide employees with a targeted amount of future income. 6. Employer contri... click for more

Accounting - True or False

14. The threat of undisclosed or contingent liabilities is minimized if assets are acquired through a merger. 15. As a general rule, a tax-deferred acquisition is financed primarily with stock of the acquiring corporation. 16. Investment banking fees paid by the acquiring corporation as part of a taxable merger are deductible in the year paid. 17. In a Chapter 11 bankruptcy proceeding, the company is liquidated and all of its assets are sold in a dissolution and cessation of the company’s business activities. 18. Dilbert Company paid $200,000 cash in full settlement of a $175,000 debt. Before the payment, its assets were worth $265,000, and its debts equaled $290,000. None of... click for more

Short Case Brief OLD COLONY TRUST CO. v. COM'R OF INTERNAL REVENUE, 279 U.S. 716 (1929)

Short Case Brief OLD COLONY TRUST CO. v. COM'R OF INTERNAL REVENUE, 279 U.S. 716 (1929). See attached file for full problem description.

Charity Contribution

Ross, a calendar-year, accrual basis S corporation, makes regular and substantial contributions to local tax-exempt charitable organizations. On December 20, its board of directors authorized a $175,000 contribution to the Salvation Children's Clinic. The corporation paid the contribution on January 25. Ross' ordinary business income for the year in which the contribution was authorized was $1,286,200. Can it accrue a $175,000 separately stated charitable contribution for the year?