Chapter 3 Section 4: Multi-Jurisdictional Tax Issues in Federal Taxation

Question 1

Define controlled taxpayer

Answer 1

Any of two or more taxpayers owned or controlled directly or indirectly by the same interests

Question 2

Defined controlled transaction

Answer 2

Any transaction or transfer between two or more members of the same group of controlled taxpayers

Question 3

Define uncontrolled comparable

Answer 3

Uncontrolled transaction or taxpayer that is compared with a controlled transaction or taxpayer

Question 4

What is the general idea regarding transfer pricing

Answer 4

If the product is made in the US, then sold to an affiliate i a country with lower taxes to be sold, you need to sell it to the affiliate at a price that is comparable to what you would sell it at in an arms-length transaction

Question 5

How is apportionment for state income taxes figured?

Answer 5

Product of the apportionment factor based on property, payroll, and sales in the state times the portion of line 28 income which is apportionable, business income