Overseas Business Activities Conducted by U

question 29

Multiple Choice

Overseas business activities conducted by U.S. corporations receive which one of the following favorable tax breaks?

• A)Foreign subsidiaries of U.S. corporations are exempt from the U.S. corporate income tax unless they earn U.S.-source investment or trade or business income.
• B)Foreign subsidiaries of U.S. corporations are always exempt from the U.S. corporate income tax even if they earn U.S.-source investment or trade or business income.
• C)Domestic corporations conducting business in a foreign country through a branch office or facility can exempt non-U.S. income from the U.S. corporate income tax.
• D)All of the above are correct.

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Definitions:

Income Tax Expense

The amount of expense that a company reflects on its income statement due to federal, state, and foreign income taxes.

Income Statement

A report detailing a corporation's income and expenditures within a certain timeframe, leading to either a profit or a deficit.

Sales Revenue

The earnings obtained through the sale of products or services during a certain timeframe.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.