A Foreign Corporation Is Owned by Five Unrelated Individuals

question 64

Multiple Choice

A foreign corporation is owned by five unrelated individuals. John, Sam, and David are U.S. citizens who own 30%, 18% and 9%, respectively, of the foreign corporation's single class of stock. Alberto and Manuel are nonresident aliens who own 37% and 6%, respectively, of the foreign corporation's stock. Which of the following statements is true?

• A) There are two "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CFC).
• B) There are three "U.S. shareholders" and the foreign corporation is not a controlled foreign corporation (CFC).
• C) There are two "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CFC).
• D) There are three "U.S. shareholders" and the foreign corporation is a controlled foreign corporation (CFC).

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Definitions:

Utility Function

A mathematical representation of how different combinations of goods or services can result in varying levels of satisfaction or utility to a consumer.

Consumer's Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive from the purchase.

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or foreign bodies.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.