Which of the Following Statements Regarding Translation of Foreign Taxes

question 126

Multiple Choice

Which of the following statements regarding translation of foreign taxes is true?

• A) Foreign taxes are typically paid in a foreign currency and thus must be converted to U.S. dollars when used as a FTC on a U.S. return.
• B) Foreign taxes are translated into U.S. dollars only when such translation provides a tax benefit to the taxpayer.
• C) Translation of foreign taxes into U.S. dollars helps manage the U.S. balance of trade.
• D) Translation of foreign taxes into U.S. dollars encourages foreign corporations to set up operations in the United States.

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Definitions:

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, as reported in a company's cash flow statement.

Cash Dividends

Payments made by a company out of its profits to its shareholders in the form of cash.

Investing Activities

Financial transactions related to the acquisition or disposal of long-term assets and investments.

Investing Activities

Transactions involving the acquisition or disposal of non-current assets like property, plant, and equipment, or securities, which are part of a company’s cash flow statement.