Suppose a Foreign Subsidiary Earns $1 Million After Paying Foreign

question 19

Multiple Choice

Suppose a foreign subsidiary earns $1 million after paying foreign income taxes of $800,000.If the subsidiary pays a dividend of $600,000,what is the amount of the indirect foreign tax credit that its parent will receive?

• A)$480,000
• B)$800,000
• C)$400,000
• D)it receives no foreign tax credit

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Definitions:

Inferiority Complex

A psychological condition that arises from persistent feelings of inadequacy, often leading to overcompensation or avoidance behaviors, differing in intensity from general inferiority feelings.

Oedipus Complex

A concept in psychoanalytic theory involving a child's unconscious desire for the opposite-sex parent and jealousy toward the same-sex parent.

Inferiority Feelings

Emotions or beliefs stemming from a sense of inadequacy or failure to measure up to standards or peers.

Carefree Nature

A personality trait characterized by the absence of worry or stress, and a light-hearted, easygoing approach to life.