Which of the Following Statements Regarding the Translation of Foreign

question 28

Multiple Choice

Which of the following statements regarding the translation of foreign income taxes is true?

• A) Translation of foreign taxes into U.S. dollars helps manage the U.S. balance of trade.
• B) Foreign taxes are translated into U.S. dollars only when such translation provides a tax benefit to the taxpayer.
• C) Foreign taxes typically are paid in a foreign currency and, thus, must be converted to U.S. dollars when used as a FTC on a U.S. return.
• D) Translation of foreign taxes into U.S. dollars encourages foreign corporations to set up operations in the United States.

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Definitions:

Written Communication

The process of conveying messages or information through written symbols, texts, or documents.

Oral Communication

The process of verbally transmitting information and ideas from one individual or group to another.

Mutual Agreement

A concord reached voluntarily between two or more parties on a set of terms or conditions.

Negotiation

The process where two or more parties discuss an issue to reach a mutually acceptable agreement.