What does nonresident alien mean on the CPA exam?
Nonresident alien. An individual who is neither a United States citizen nor a resident under the green card or substantial presence tests. Taxed only on United States source income and on income effectively connected with a United States business.
Defined against Sec. 7701(b).
Which CPA exam sections use nonresident alien?
Nonresident alien appears in the REG section of the CPA exam.
Related terms
- small business corporation: The eligibility test for an S election: a domestic corporation, not an ineligible corporation, with no more than 100 shareholders, no shareholder other than an individual, estate, qualifying trust, or qualifying exempt organization, no nonresident alien shareholder, and one class of stock.
- straight debt: A written unconditional promise to pay a sum certain whose interest is not contingent on profits, which is not convertible into stock, and whose creditor is an individual other than a nonresident alien, an estate, qualifying trust, or regular lender.
- constructive receipt: Income is taxed when it is made available without substantial restriction, not when it is collected.
- gross income: All income from whatever source derived, unless the Code specifically excludes it.
- ordinary income: Income taxed at the regular graduated rates rather than at preferential capital gain rates.
- separately stated item: Income, deduction or credit that keeps its own character as it passes through to the owner, because the owner's own situation decides how it is taxed.