Which of the Following Income Earned by a Controlled Foreign

question 60

Multiple Choice

Which of the following income earned by a controlled foreign corporation incorporated in Spain is not foreign personal holding company income?

• A) Interest income received from a loan to an unrelated party.
• B) Dividend income from a five percent investment in an unrelated corporation.
• C) Rent received from a passive investment in an apartment complex.
• D) Gross profit from the manufacture and sale of inventory to an unrelated party.

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Definitions:

Administrative Expenses

Costs related to the general operations of a business that are not directly tied to a specific project or product.

Tax-Related Gains

Profits derived from tax strategies, deductions, or credits that reduce the overall tax liability.