What is the "Safe Harbor Rule?"
A) If a foreign tax rate is 90% or more of the U.S. corporate tax rate, no part of a controlled foreign corporation's income is considered Subpart F income.
B) This is a guideline issued by the OEDC that encourages developed countries to open branches in underdeveloped countries.
C) If a controlled foreign corporation's Subpart F income is less than 10% of its total income, it will not be taxed currently by the U.S. government.
D) If a controlled foreign corporation's Subpart F income is less than 10% of its total income, it will not be taxed until dividends are received by the parent.
Correct Answer:
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