Fulton, Ltd

question 58

Multiple Choice

Fulton, Ltd., a foreign corporation, operates a U.S. branch that reports effectively connected U.S. earnings and profits (after income taxes) of $600,000 for the tax year. The branch's U.S. net equity at the beginning of the tax year is $2 million and at the end of the tax year is $1.5 million. Fulton is organized in a nontreaty country. Fulton's dividend equivalent amount for the year is:

• A) $100,000.
• B) $500,000.
• C) $600,000.
• D) $1,100,000.

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Definitions:

Global Explanations

Broad interpretations or reasons given for events or behaviors that apply universally across different situations.

Internal

Pertaining to or situated on the inside; relating to the inner nature of something or someone.

Pessimism

The tendency to see the worst aspect of things or believe that the worst will happen; a lack of hope or confidence in the future.

Pessimistic Explanatory

A tendency to interpret and explain negative events as being widespread, permanent, and uncontrollable.