Sara Jones, a brilliant U.S. citizen who developed a unique and healthy way...
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Sara Jones, a brilliant US citizen who developed a unique and healthy way to lose weight quickly, is encouraged by her dear friend in Country X to open a Country X business as soon as possible because the citizens and residents of Country X are among the most overweight people in the world! In a hurry to get her business started back in early and to own an entity that shielded her from any legal liability, Sara formed a Country X corporation, Fat Loss, Inc., which for US tax purposes is a per se corporation. Country X has no income tax treaty with the United States. For Fat Loss, Inc. generated pretax Country X net income of $ and paid the Country X corporate income tax rate of On January Fat Loss, Inc. paid Sara a dividend of $ Sara is in the income tax bracket. After considering the qualified dividend income rules and the foreign tax credit rules, Sara will owe the US how much in US income tax: FOR PURPOSES OF THIS EXAMPLE, DISREGARD THE NET INVESTMENT INCOME TAX
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