Which of the Following Statements Is True, Regarding the Sourcing

question 89

Multiple Choice

Which of the following statements is true, regarding the sourcing of dividend income?

• A) Dividends are sourced based on the residence of the recipient.
• B) Dividends from non-U.S. corporations are always foreign source.
• C) Dividends from non-U.S. corporations are foreign-source only to the extent that 80% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a non-U.S. trade or business.
• D) A percentage of dividends from non-U.S. corporations are U.S. source to the extent that 25% or more of the non-U.S. corporation's gross income for the 3 years preceding the year of the dividend payment was effectively connected with the conduct of a U.S. trade or business.

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Definitions:

Sales Revenues

The income earned by a company from its sales of goods or the provision of services, before any costs or expenses are deducted.

Gross Profit Margin

A financial ratio that indicates the percentage of revenue that exceeds the cost of goods sold, reflecting the efficiency of a company in managing its production and labor costs.

Chosen A

A selection or preference identified as option A, indicating a different choice from a set of options.

Chosen B

A selection or preference identified as option B.