Which of the Following Statements About the Foreign Tax Credit

question 13

Multiple Choice

Which of the following statements about the foreign tax credit limitation is false?

• A) The foreign tax credit cannot exceed the U.S. tax on foreign source income.
• B) Foreign tax credits in excess of the limit can be carried forward indefinitely.
• C) Cross-crediting of taxes paid in high-tax and low-tax foreign jurisdictions can increase allowable foreign tax credits.
• D) The foreign tax credit limitation is based on the ratio of foreign source income to total taxable income.

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Definitions:

Informal Communication

A type of communication that occurs outside official channels without formal procedures or structure.

Systems/Contingency

A theory in organizational behavior that posits the effectiveness of a management approach is contingent upon the internal and external environment.

Virtual Organization

A business model that operates online, often without a traditional physical presence, relying heavily on information and communication technologies.

Temporary Venture

A project or enterprise undertaken for a limited duration, often to achieve a specific goal or address a particular need.