Which of the Following Statements Regarding Foreign Persons Not Engaged

question 14

Multiple Choice

Which of the following statements regarding foreign persons not engaged in a U.S. trade or business is true?

• A) Foreign persons are subject to potential withholding taxes on the gross amount of U.S.-source investment income.
• B) Foreign persons with any U.S.-source income are taxed on net investment income (after expenses).
• C) Foreign persons are not subject to U.S. tax if not engaged in a U.S. trade or business.
• D) Foreign persons with only U.S.-source investment income are exempt from U.S. tax.

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Definitions:

Inelastic

An inelastic good or service has a demand that does not change significantly when its price goes up or down.

Insensitive to Price

A characteristic of demand wherein the quantity demanded by consumers changes very little with a change in the product's price.

Unit Elastic

A situation in economics where the percentage change in quantity demanded is equal to the percentage change in price, resulting in no change in total revenue.

Total Revenue

The overall financial returns a corporation secures by selling products and providing services across a certain interval.