A Deferral Principle Specifies That Parent Companies Are Not Taxed

question 13

Multiple Choice

A deferral principle specifies that parent companies are not taxed on foreign source income until _____.

• A) the subsidiary providing income makes some profit
• B) they actually receive a dividend
• C) they acquire majority stake in the subsidiary
• D) the subsidiary providing income is listed in the U.S.

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Definitions:

Compensatory Damages

Financial reparations awarded to a plaintiff to compensate for loss, injury, or harm suffered due to the defendant's actions.

Breaching Party

The entity or individual that fails to fulfill their contractual obligations, thereby violating the contract.

Technical Injury

A legal injury claimed in a lawsuit, often without tangible harm, based on a technical violation of a statute or regulation.

Actual Damage

Financial loss or harm that can be quantified or specifically identified, resulting from the breach of a legal duty or infringement of rights.