Which of the Following Exceptions Could Cause Subpart F Income

question 35

Multiple Choice

Which of the following exceptions could cause subpart F income to be excluded from the deemed dividend regime?

• A)The full inclusion rule only
• B)The de minimis rule only
• C)The high-tax rule only
• D)The de minimis rule and the high-tax rule could cause subpart F income to be excluded from the deemed dividend regime.

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Definitions:

Initial Value Method

An accounting approach where investments are recorded at their purchase cost without adjustment for changes in market value.

Noncontrolling Interest

A share in the equity of a subsidiary not owned by the parent company, also known as minority interest, reflecting ownership that does not have controlling power.

Net Income

The amount of total revenues that exceed total expenses of a company in a given period, often viewed as "profit" or "earnings."

Initial Value Method

The Initial Value Method is an accounting approach for investments, where the investment is recorded at its cost at the time of purchase without adjusting for changes in market value.