Match the Definition with the Correct Term

question 113

Multiple Choice

Match the definition with the correct term.
-Income of foreign person taxed through filing of a U.S. tax return with deductions allowed against gross income.

• A)Expatriate
• B)Resident
• C)Nonresident alien
• D)U.S. trade or business
• E)Effectively connected income

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Definitions:

Principal Amount

The initial size of a loan or debt on which interest is calculated, or the original investment amount in a financial instrument.

Maturity

The date on which a financial obligation must be repaid in full.

Zero-Coupon Bond

A debt security that does not pay interest but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.

Imputed Interest

The interest on a loan that the IRS assumes was paid for tax purposes, even if no actual interest payment was made.