What Are the Consequences of Classification as a Corporate Inversion

question 42

Multiple Choice

What are the consequences of classification as a corporate inversion?

• A) The foreign corporation will be treated as if it is a U.S. corporation.
• B) The corporation will be subject to a flat 35% tax rate.
• C) Foreign tax credits will be disallowed on all future earnings.
• D) If more than half of the shareholders of the new company are the same as the former company, the corporation is considered a U.S. corporation.

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Definitions:

Hypochondriac

A person excessively worried about having a serious illness, often with no basis for such concerns.

Lumbar

Relating to the lower part of the back or the lower spine between the thoracic spine and the sacral region.

Iliac

Pertaining to the ilium, the largest bone of the pelvis.

Hypogastric

Relating to the lower middle region of the abdomen, beneath the umbilical region.