Which Statement Best Describes the U

question 50

Multiple Choice

Which statement best describes the U.S. framework for taxing non-U.S. persons on income earned from U.S. sources?

• A)Income that is characterized as effectively connected income is subject to net taxation while income that is characterized as fixed and determinable, annual or periodic income is subject to a withholding tax applied to gross income.
• B)Income that is characterized as effectively connected income is subject to a withholding tax applied to gross income while income that is characterized as fixed and determinable, annual or periodic income is subject to net taxation.
• C)All U.S. source income is subject to net taxation, regardless of whether it is characterized as effectively connected or as fixed and determinable, annual or periodic income.
• D)All U.S. source income is subject to a withholding tax applied to gross income, regardless of whether it is characterized as effectively connected or as fixed and determinable, annual or periodic income.

---

Definitions:

Early Payment

A repayment of a loan or debt made before the due date, often to reduce interest costs.

Invoice Paid

A document or bill that has been settled or paid in full.

Credit Card Discount

A fee charged by credit card processors to merchants for accepting credit card payments, often a percentage of the transaction value.

Net Sales

Revenue from sales minus returns, allowances, and discounts.