US Citizen Patrick Is a Bona Fide Resident of a Foreign

question 86

Multiple Choice

U.S. citizen Patrick is a bona fide resident of a foreign country for all of the current year. Patrick uses a calendar year as his tax year. He has $100,000 of self- employment income and incurs $20,000 in housing expenses. The base housing cost amount is $16,624. The deduction for housing expenses is

• A) $16,624 for AGI.
• B) $6,816 from AGI.
• C) $16,624 from AGI.
• D) $3,376 for AGI.

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Definitions:

Total Dividends

The sum of all dividend payments made by a company to its shareholders over a specific period.

Residual Dividend Policy

A financial policy regarding dividend payments where dividends are only issued after all project and operational expenses have been met and all planned investments are funded.

Optimal Capital Budget

The set of projects that maximizes the value of the firm.

Retained Earnings

The portion of a company’s net profits which is kept within the company instead of being paid out to the shareholders as dividends.