Which of the Following Statements Best Describes the Substantial Presence

question 34

Multiple Choice

Which of the following statements best describes the substantial presence test as it applies to determining if a non U.S. citizen is a resident alien for U.S. tax purposes?

• A) To be treated as a resident alien, an individual must be physically present in the United States for 183 days in the current year.
• B) To be treated as a resident alien, an individual must be physically present in the United States for 183 days in the current year and each of the prior two years.
• C) To be treated as a resident alien, an individual must be physically present in the United States for 183 days using a formula that includes the current year and the prior two years.
• D)To be treated as a resident alien, an individual must be physically present in the United States for 183 days using a formula that includes the current year and the prior year.

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Definitions:

Stockholder's Equity

Ownership interest represented by what remains of a company's assets once all liabilities have been deducted.

Assets

Resources owned by a business that have economic value and can be used to meet debts or generate income.

Fiscal Year

A twelve-month period used for calculating annual financial statements in businesses and other organizations, which may or may not align with the calendar year.

Natural Business Year

A fiscal year that ends when business activities have reached the lowest point in an annual operating cycle.