The USIRS Allows Transfer Prices to Be Set Using Comparable Uncontrolled

question 52

Multiple Choice

The U.S.IRS allows transfer prices to be set using comparable uncontrolled price method.This method requires

• A)finding the price that an unrelated willing seller would accept from an unrelated willing buyer.
• B)the price at which the good is resold by the distribution affiliate is reduced by an amount sufficient to cover overhead costs and a reasonable profit.
• C)an appropriate profit is added to the cost of the manufacturing affiliate.
• D)financial models and econometric techniques.

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Definitions:

Jurisdiction

The legal authority granted to a court or governmental entity to make decisions and enforce laws.

Diversity Jurisdiction

Federal courts' authority to hear lawsuits involving parties from different states or countries, based on their diversity of citizenship.

Corporation

A firm that is authorized by statute to act as a legal entity separate and distinct from its owners (shareholders).

Federal Courts

Courts established by the federal government of a country, which have jurisdiction over matters outlined in the federal constitution.