According to the tax credit,

Question

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The tax credit allows firms to reduce their tax liability by the amount of income taxes paid to foreign governments, which is known as a foreign tax credit. Option A is incorrect since the recognition of income is not deferred until a dividend has been declared. Option B is incorrect since income can still be subject to U.S. taxation even with the tax credit. Option D is incorrect since credits can also be given for passive income in some cases.

According to the Tax Credit