Section 482 of the U.S. Internal Revenue Code governing the taxation of multinational transfer pricing recognizes that transfer prices can be:
A)market based
B)negotiated
C)cost-plus based
D)Both A and C are correct.

Question

Quizplus · Accepted Answer

Section 482 of the U.S. Internal Revenue Code allows for transfer prices to be determined based on market-based or cost-plus methods. Both options (A and C) are recognized under this section. Negotiated transfer prices are not explicitly mentioned, but they may be used as a basis for determining market-based prices. Therefore, choice D (Both A and C are correct) is the best choice.