A Cost-Plus Transfer Pricing Scheme Is Allowed by the Internal

question 42

Multiple Choice

A cost-plus transfer pricing scheme is allowed by the Internal Revenue Service when:

• A)it is easiest for the taxpayer to calculate.
• B)the related party is primarily a sales subsidiary.
• C)there is no readily comparable market price and the related buyer is more than just a distributor.
• D)the average industry mark-up is greater than the taxpayer's standard markup.

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