Please help with tax problems

Nov 25th, 2014
Price: $10 USD

Question description

1. Martinho is a citizen of Brazil and lives there year-round. He has invested in a plot of Illinois farmland with a tax basis to him of $1 million. Martinho has no other business or investment activities in the United States. He is not subject to the alternative minimum tax.

a. Upon sale of the land for $1.5 million to Emma, an Illinois person, what are the Federal income tax consequences to Martinho?

Create, Inc., produces inventory in its foreign manufacturing plants for sale in the United States. Its foreign manufacturing assets have a tax book value of $5 million and a fair market value of $15 million. Its assets related to the sales activity have a tax book value of $200000 and a fair market value of $50000. Create s interest expense totaled $300000 for the current year.

a. What amount of interest expense is allocated and apportioned to foreign-source income using the tax book value method? What amount of Create s interest expense is allocated and apportioned to foreign-source income using the fair market method?

 b. If Create wishes to maximize its FTC, which method should it use?

Tutor Answer

(Top Tutor) Linda M
School: University of Maryland

Studypool has helped 1,244,100 students

Review from student
" Wow this is really good.... didn't expect it. Sweet!!!! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1821 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors