What Is a Benefit of Contracting with Export Trading Companies

question 33

Multiple Choice

What is a benefit of contracting with export trading companies?

• A) They are the experts in establishing trading partners abroad, and negotiating all the details in retaining customers.
• B) They are experts in staying out of the financial transactions of establishing new markets.
• C) They will always assume the risk if your product does not sell to the foreign customer.
• D) They keep you legal because they serve as the franchisor and make certain that your products meet ISO requirements.

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Definitions:

Material Participation

Active involvement in the operations of a business or trade, as defined by the IRS, to qualify for certain tax benefits.

Trade or Business

An activity conducted for the production of income from selling goods or performing services, differentiating from investment or leisure activities for tax purposes.

Schedule K-1

A tax document used in the United States to report an individual's share of income, deductions, credits, etc., from partnerships, S corporations, or other pass-through entities.

Schedule E

A part of the IRS tax forms used for reporting income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs.