Which of the Following Items of Foreign Source Income Is

question 55

Multiple Choice

Which of the following items of foreign source income is classified as passive category income for foreign tax credit purposes?

• A) Dividend received from a 5 percent owned foreign corporation, all of the income of which is derived from an active business
• B) Dividend received from a 20 percent owned foreign corporation, all of the income of which is derived from an active business
• C) Dividend received from a 100 percent owned foreign corporation, all of the income of which is derived from an active business
• D)None of the dividends are classified as passive category income

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Definitions:

Qualifying Child

A dependent child who meets specific IRS criteria concerning age, relationship, residency, and support, allowing the taxpayer to claim certain tax benefits.

EIC

The Earned Income Credit is a refundable tax credit designed for individuals and families with low to moderate income who work, especially those with children.

Qualified Expenses

Expenses that meet criteria set by tax law or other regulations for tax benefits or deductions.

Felony Drug Possession

A serious criminal charge involving the unauthorized possession of controlled substances, which is illegal under federal and state laws.