In a Given Year, the U

question 33

Multiple Choice

In a given year, the U.S. IRS places an overall limitation applied to foreign tax credits.

• A)The maximum tax credit is figured on world-wide foreign-source income; losses in one country can offset profits in another.
• B)Value-added taxes paid cannot be included in determining the amount of the foreign tax credit.
• C)The overall limitation is limited to the amount of tax that would be due on the foreign-source income if it had been earned in the United States.
• D)All of the above

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Definitions:

Valid Consideration

Something of legally sufficient value that is exchanged between parties in a contract, forming the basis for the agreement.

Contract

A legally-binding agreement between two or more parties that outlines obligations and rights of the parties.

Holder in Due Course

A party possessing a negotiable instrument (like a check) in good faith and for value, with certain protections against claims and defenses.

Payable to Cash

A term indicating that a check or other document is made out to "Cash" instead of a specific payee, allowing anyone who holds it to cash it.