In Order to Avoid Double Taxation on the Income of Foreign

question 40

Multiple Choice

In order to avoid double taxation on the income of foreign subsidiary companies, U.S. tax law:

• A) does not tax income repatriated to the U.S. parent company.
• B) allows the U.S. parent company to take a 100 percent tax credit for foreign income taxes paid.
• C) provides a deduction for foreign income taxes paid.
• D) none of the above. U.S. companies are usually subject to double taxation when they have foreign subsidiaries.

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Definitions:

Interests

Personal or professional areas of attention or concern that motivate individuals to engage in specific activities.

Behavior

The actions or reactions of an individual or system in response to external or internal stimuli.

Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group.

Total Surplus

Total surplus is the sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from trading in the market.