Determine the amount of income taxable in the united states

Reference no: EM131240436

Taxable Income and International Transfer Pricing

Mama Corporation (a U.S. taxpayer) has a wholly owned sales subsidiary in the Bahamas (Bahamamama Ltd.) that purchases finished goods from its U.S. parent and sells those goods to customers throughout the Caribbean basin. In the most recent year, Bahamamama generated income of $100,000 and distributed 50% of that amount to Mama Corporation as a dividend. There are no income or withholding taxes in the Bahamas. Using this information, complete all three parts of this assignment:

• Part 1: Determine the amount of income taxable in the United States, assuming that Bahamamama makes 20% of its sales in the Bahamas and 80% in other countries.

• Part 2: Determine the amount of income taxable in the United States, assuming that Bahamamama makes 40% of its sales in the Bahamas and 60% in other countries.

• Part 3: How do companies use international transfer pricing to minimize their tax burden? Why and how do tax authorities get involved in the transfer pricing situation?

Compile Parts 1 and 2 in a Word document and conclude with a 1-2 page analysis of Part 3 along with the appropriate calculations for Part 1 and Part 2.Support your statements with references from the text and a minimum of two (2) additional sources formatted according to CSU-Global Guide to Writing and APA Requirements. The CSU-Global Library is a good place to locate these sources.

Reference no: EM131240436

Questions Cloud

Initializing and reloading a router and switch : You find a couple configurations issues after saving the running configuration to the startup configuration, so you make the necessary changes to fix those issues. If you were to reload the device now, what configuration would be restored to the d..

What is the rate at which radiation is emitted by surface : What is the net rate at which radiation is exchanged between the surface and the chamber walls?

Read a symmetric matrix from a text file : Your program should read a symmetric matrix from a text file that describes weighted edges of an undirected, connected graph and find the MST that is saved in an output file as a sequence of edges of the MST. The program also displays the numbers ..

How migration flows and urbanization were connected : Describe the general trend known as "cultural modernism" in the industrial world during the late 19th and early 20th centuries, with reference to at least two major characteristics of that trend (in different contexts such as literature, philosoph..

Determine the amount of income taxable in the united states : Determine the amount of income taxable in the United States, assuming that Bahamamama makes 20% of its sales in the Bahamas and 80% in other countries.

Ethical concerns that drones bring to warfare : What are some of the ethical concerns that drones bring to warfare? Are they internationally legal? (at least 200 word minimum)

What is the heat transfer rate from the steam line : The surface emissivity is ε = 0.8. What is the heat transfer rate from the steam line? Would applying a low emissivity coating (ε = 0.10) to the pipe exterior surface change the heat transfer rate significantly?

Design of a hydroelectric dam : Write a program to assist in the design of a hydroelectric dam. Prompt the user for the height of the dam and for the number of cubic meters of water that are projected to flow from the top to the bottom of the dam each second.

How building from our weekly learning and readings : How were religious subjects treated by Baroque artists, writers and/or musicians? Include specific examples to support your view on this topic, and how building from our weekly learning, readings? How are religious subjects treated toda.

User Account

All Pages