Foreign source income that is derived from the active conduct of a trade or business and therefore subject to U.S.taxation is known as ________.
A)passive income
B)active income
C)uncontrollable foreign corporation income
D)tax haven income

Question

Quizplus · Accepted Answer

Foreign source income that is derived from the active conduct of a trade or business is known as active income, and it is subject to U.S. taxation. Passive income, on the other hand, is income earned from investments or rental property and is usually subject to a different tax treatment. Uncontrollable foreign corporation income and tax haven income are not relevant to the definition of foreign source income that is subject to U.S. taxation.

Foreign Source Income That Is Derived from the Active Conduct