Which of the Following Is a Principle Used in Applying

question 80

Multiple Choice

Which of the following is a principle used in applying the income-sourcing rules under U.S. tax law?

• A) The rules should be acceptable to both countries.
• B) The rules should favor the U.S. Treasury.
• C) The rules should favor the treasury of the non-U.S. country.
• D) The rules should apply to income items only; deductions need not be sourced in this way.

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Definitions:

Oral Contracts

Agreements that are made verbally and are legally binding, though harder to prove than written contracts.

Written Confirmation

A document that records and verifies specific details of an agreement or transaction between two or more parties.

Merchant

An individual or company engaged in the wholesale purchase and retail sale of goods for profit.

Usage of Trade

Customary practices and usages that parties to a transaction in a particular trade commonly observe.