Which statement best describes the U.S. framework for taxing multinational transactions?

Question

Quizplus · Accepted Answer

The U.S. government applies residence-based taxation to income earned by U.S. persons, meaning that they are taxed on their worldwide income regardless of where it was earned. For income earned by non-U.S. persons, the U.S. government applies source-based taxation, which means that income earned within the U.S. is subject to U.S. taxation, but income earned outside the U.S. is not taxable in the U.S. except in certain circumstances, such as income from U.S. sources received by a foreign corporation controlled by U.S. persons.

Which Statement Best Describes the U