Which of the Following Statements Regarding Foreign Persons Not Engaged

question 115

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.
• E)None of the above statements are true.

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Definitions:

Operating Hours

The scheduled or actual hours during which a business is open to conduct operations or provide services to customers.

Double-Declining-Balance Rate

A method of accelerated depreciation that applies a constant rate, which is double the straight-line rate, to the declining book value of an asset each year.

Straight-Line Rate

A method of calculating depreciation of an asset, dividing its cost by the number of years in its useful life.

Depreciation Expense

The structured spreading of the expense associated with a tangible asset across its useful life.