Problem;
Rick Rocker, a citizen and resident of country F, decides to perform a concert in Los Angeles. The U.S. promoter has agreed to pay Rocker $1 million. Rocker himself incurs $200,000 of expenses in connection with the concert.
Required:
When the promoter pays Rocker his fee, the promoter:
- Should withhold $300,000 of U.S. tax.
- Does not have to withhold any U.S. tax.
- Must withhold tax at Rocker's marginal rates.
- Should withhold $240,000 of U.S. tax.
Note: Please show the work not just the answer.