According to U.S.tax law, if a foreign subsidiary earns income, ________.
A)its income is immediately taxable to the parent, irrespective of the type of income earned
B)that income is not taxable to the parent company as long as the subsidiary pays income taxes in the country where it is earned
C)passive income is taxable to the parent unless the parent company is a controlled foreign corporation
D)active income is taxable to the parent when it is remitted as a dividend

Question

Quizplus · Accepted Answer

Active income earned by a foreign subsidiary is generally not taxable to the U.S. parent company until it is repatriated, such as when it is paid out as a dividend.