Which of the Following Statements About the Foreign Tax Credit

question 43

Multiple Choice

Which of the following statements about the foreign tax credit is true?

• A) The foreign tax credit allows U.S. companies to defer U.S. tax on foreign source income.
• B) The foreign tax credit is available to foreign corporations doing business in the U.S.
• C) The foreign tax credit is allowed for all types of foreign taxes.
• D) By permitting a foreign tax credit, the U.S. relinquishes its taxing jurisdiction on foreign source income earned by U.S. corporations to the extent that income is taxed by a foreign jurisdiction.

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Definitions:

Per Stirpes

A legal term referring to the equal distribution of an estate to heirs according to their deceased ancestor's share.

Totten Trust

A form of revocable trust created during the trustee's lifetime where the funds in a bank account are payable on the trustee's death to a named beneficiary.

Holographic Will

A will entirely handwritten and signed by the testator.

Bank Deposit

A bank deposit involves placing money into a banking institution for safekeeping, with the funds typically available for withdrawal at a later date.