Identify Which of the Following Statements Is True

question 36

Multiple Choice

Identify which of the following statements is true.

• A)Foreign-base company sales income is earned when personal property is purchased by a Country X controlled foreign corporation (CFC)from its U.S.parent corporation and is sold to unrelated persons in Country Z.
• B)Section 482 permits the IRS to restructure transactions between related parties as if the transactions were conducted at arm's length.
• C)One tax avoidance practice which Sec.482 attempts to prevent is the transfer of tangible property to a foreign subsidiary at a price which is below the arm's-length price that would be used by unrelated parties.
• D)All of the above are true.

---

Definitions:

Heuristic

is a simple, efficient rule or method used to make decisions or solve problems, based on practical judgement rather than comprehensive logical analysis.

Critical Thinking

The disciplined process of actively and skilfully conceptualizing, applying, analyzing, synthesizing, and evaluating information to reach an answer or conclusion.

Deliberative Thinking

The process of carefully considering and rationalizing thoughts and options before making a decision or forming a judgment.

Active Thinking

The deliberate, conscious mental process of generating ideas, solving problems, and making decisions.