Which of the Following Tax or Non-Tax Benefits Does Not

question 38

Multiple Choice

Which of the following tax or non-tax benefits does not arise when a U.S. corporation forms a hybrid entity in Germany through which to earn business profits in Germany and elects to have the entity treated as a branch for U.S. tax purposes?

• A)Potential exemption from U.S. tax on income earned by the corporation.
• B)Flow-through of losses from the German corporation to the tax return of the U.S. corporation.
• C)Limited liability to the U.S. corporation for acts committed by the hybrid entity.
• D)Free transferability of the stock of the hybrid entity by the U.S. corporation.

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Definitions:

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