Miguel is a citizen and resident of Brazil. During the current year, Miguel never visits the United States nor does he hold a green card. However, he received a dividend from Micro Corporation, received interest on a bond issued by MBI Corporation, realized a gain on the sale of Extel Corporation stock, and realized a gain on the sale of 1,000 acres of undeveloped land located in Texas. Micro, MBI and Extel are all corporations organized in the United States. The United States does not have an income tax treaty with Brazil.

Describe the U. S. tax consequences of each of the above items of income. Also, indicate how your answers would change if Miquel held a green card.

In each of the cases below, assume division x has a product that can be sold either to outside customers or to division y of the same company for use in its production process. the managers of the divisions are evaluated based on their divisional profits. case a b division x: capacity in units 200,000 200,000 number of units being sold to outside customers 200,000 160,000 selling price per unit to outside customers $ 90 $ 75 variable costs per unit $ 70 $ 60 fixed costs per unit (based on capacity) $ 13 $ 8 division y: number of units needed for production 40,000 40,000 purchase price per unit now being paid to an outside supplier $ 86 $ 74 required: 1. refer to the data in case a above. assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. a. what is the lowest acceptable transfer price from the perspective of the selling division? b. what is the highest acceptable transfer price from the perspective of the buying division? c. what is the range of acceptable transfer prices (if any) between the two divisions? if the managers are free to negotiate and make decisions on their own, will a transfer probably take place?