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57. Which of the following circumstances would favor the foreign earned income exclusion over the foreign tax credit? a. Income is subject to a high tax rate in the foreign country. b. Income is too high to qualify for either the full exclusion or the full credit. C. 30% of foreign income is considered earned; the other 70% is investment income. d. Income is subject to a low tax rate in the foreign country.
Discuss why the US has the authority to tax foreigntransactions. What is the foreign tax credit and when can it beused? The foreign earned income exclusion?
14. What are the highest tax rates for each of the followingscenarios?
____. Operating income from a hotel earned by a foreigncorporation (excluding branch profits tax)
____. Interest income earned by a foreign corporation from a USborrower
____. Net rental income earned by an U.S. individual (excludethe passthrough deduction)
____. Capital gain earned by an U.S. individual
____. Interest income earned by a U.S. corporation
____. Capital gain earned by an U.S. corporation
____. Depreciation recapture on the sale of U.S. real estate(Section 1250 property) for an individual
____. Depreciation recapture on the sale of U.S. real estate(Section 1245 property) for an individual