In Order to Qualify for the Favorable Tax Treatment of a Foreign

question 66

Multiple Choice

In order to qualify for the favorable tax treatment of a Foreign Sales Corporation,a U.S.firm must meet all of the following tests,except:

• A) At least one director must be a nonresident of the U.S.
• B) Its income must be derived from qualified export activity such as the sale of goods abroad.
• C) Management must be outside the U.S.
• D) None of the income may be repatriated to the United States.
• E) The FSC must participate in soliciting, negotiating, or contracting with a foreign buyer.

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Definitions:

Reconditioning

The process of rebuilding physical strength and conditioning through specific exercises after a period of inactivity, illness, or injury.

Stimulus Generalization

The process by which a response conditioned to a specific stimulus becomes triggered by stimuli that are similar but not identical to the original stimulus.

Disinhibition

The reduction of restraint or inhibition which can lead to the expression of behaviors normally kept under control.

Renewal Effect

The phenomenon where extinguished responses reappear when the context or environment is changed after extinction.