What Is the "Safe Harbor Rule

question 47

Multiple Choice

What is the "Safe Harbor Rule?"

• A) If a foreign tax rate is 90% or more of the U.S. corporate tax rate, no part of a controlled foreign corporation's income is considered Subpart F income.
• B) This is a guideline issued by the OEDC that encourages developed countries to open branches in underdeveloped countries.
• C) If a controlled foreign corporation's Subpart F income is less than 10% of its total income, it will not be taxed currently by the U.S. government.
• D) If a controlled foreign corporation's Subpart F income is less than 10% of its total income, it will not be taxed until dividends are received by the parent.

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Definitions:

Intangible Property

Property that does not have a physical substance but possesses value, such as patents, copyrights, trademarks, and goodwill.

Bank Account

A financial account maintained by a bank or another financial institution in which the depositor can store money and make transactions.

United States Patent And Trademark Office

The federal agency for granting U.S. patents and registering trademarks, overseeing the protection of intellectual property.

Domain Name

The address of a website on the internet, which corresponds to a specific IP address and is used to access online information.