Which of the Following Statements Best Describes the Operation of Subpart

question 95

Multiple Choice

Which of the following statements best describes the operation of subpart F as it applies to income earned by a foreign corporation?

• A)Subpart F causes all income of a controlled foreign corporation to be treated as a deemed dividend to all U.S. persons owning stock in the corporation on the last day of the corporation's tax year.
• B)Subpart F causes certain income of a controlled foreign corporation to be treated as a deemed dividend to all U.S. persons owning stock in the corporation on the last day of the corporation's tax year.
• C)Subpart F causes certain income of a controlled foreign corporation to be treated as a deemed dividend to only those U.S. shareholders owning stock in the corporation on the last day of the corporation's tax year.
• D)Subpart F causes all income of a controlled foreign corporation to be treated as a deemed dividend to only those U.S. shareholders owning stock in the corporation on the last day of the corporation's tax year.

---

Definitions:

Mortgage-Backed Securities

Financial instruments that are secured by mortgages, with payments derived from the underlying loans.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services without wasting any resources.

Competitive Forces

Pressures or influences that affect an organization's ability to compete in a market, including rivalry among existing competitors, the threat of new entrants, and bargaining power of customers and suppliers.

Market Allocation

A method of distributing goods and services among buyers and sellers wherein prices are determined by supply and demand forces in the market.