In Order to Avoid Double Taxation on the Income of Foreign

question 9

Multiple Choice

In order to avoid double taxation on the income of foreign subsidiary companies,U.S.tax law:

• A) does not tax income repatriated to the U.S. parent company.
• B) allows the U.S. parent company to take a 100 percent tax credit for foreign income taxes paid.
• C) provides a deduction for foreign income taxes paid.
• D) none of these. U.S. companies are usually subject to double taxation when they have foreign subsidiaries.

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Definitions:

Impeachment

The formal process by which governmental officials can be accused and tried for misconduct, with possible removal from office upon conviction.

Executive Privilege

Executive Privilege is the right claimed by the President of the United States and other members of the executive branch to withhold information from Congress or the courts.

Supreme Court

The highest federal court in the United States, with the ultimate judicial authority to interpret and decide upon the constitutionality of laws.

Watergate Scandal

A major political scandal in the early 1970s involving the Nixon administration's attempt to cover up its involvement in a break-in at the Democratic National Committee headquarters.