Which of the Following Tax Benefits Does Not Arise When

question 5

Multiple Choice

Which of the following tax benefits does not arise when a U.S.corporation forms a corporation in Ireland through which to earn business profits in Ireland?

• A) Potential deferral of U.S. tax on income earned by the corporation.
• B) Treaty benefits on cross border payments between the Irish corporation and the U.S. corporation.
• C) Use of transfer pricing to shift income between the United States and Ireland.
• D) Flow-through of losses from the Irish corporation to the tax return of the U.S. corporation.

---

Definitions:

Amortization Period

The length of time it takes to pay off a loan or mortgage in full with regular payments that cover both principal and interest.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, so the balance doesn't merely grow; it grows at an increasing rate.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Loan

Money that is borrowed, typically from a bank or financial institution, that is expected to be paid back with interest.