Lawrence Is a U

question 41

Multiple Choice

Lawrence is a U.S. citizen who has worked in his employer's Paris office for the past five years. Compute Lawrence's 2012 AGI if his only item of income was his $130,000 salary.

• A) $130,000
• B) $95,100
• C) $34,900
• D) $0

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Definitions:

Gray Market Activity

The trade of goods through distribution channels that are unauthorized by the original manufacturer. This is typically legal but unregulated and unofficial.

Countertrade

A form of international trade in which goods or services are exchanged for other goods or services rather than for hard currency.

Dumping

Selling a product for a price less than the cost of production to capture market share and force competitors out of the market.

Transfer Pricing

The setting of prices for transactions between affiliated companies within the same multinational corporate structure, affecting financial and tax reporting.