Which of the Following Statements Regarding Income Sourcing Is Not

question 29

Multiple Choice

Which of the following statements regarding income sourcing is not correct?

• A) Concerning the foreign tax credit, most U.S. persons benefit from earning low-tax foreign-source income.
• B) Foreign persons generally benefit from avoiding U.S.-source income classification.
• C) U.S. persons are not concerned with source of income because all their income is subject to U.S. tax under a worldwide system.
• D) Foreign persons may be subject to tax on U.S.-source income without regard to their actual presence in the United States.

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Definitions:

Stock Split

A corporate action to increase the number of outstanding shares by issuing more shares to current shareholders, proportionally decreasing the stock price.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including both public investors and company insiders.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but retained for reinvestment or debt payment.

Cash Assets

Resources in the form of currency or other items that can be easily converted to cash.