T Corp.owns investment securities that are physically located in State A.T is incorporated in State B and its home office (from which the securities portfolio is managed) is located in State C.States B and C impose a state income tax.The earnings on the investment securities will most likely be taxed in
A)State A
B)State B
C)State C
D)All three states
E)None of the states

Question

Quizplus · Accepted Answer

The earnings on the investment securities will most likely be taxed in State C, where T Corp.'s home office is located and from which the portfolio is managed. Although State B may impose a state income tax as well, it would typically only apply to income earned within the state's borders, which is not the case for T Corp.'s investment portfolio physically located in State A. State A, where the securities are physically located, may also impose a tax, but it is unlikely to do so since T Corp. is not incorporated or headquartered in that state. Therefore, the most likely state to impose an income tax on T Corp.'s investment earnings is State C.

T Corpowns Investment Securities That Are Physically Located in State A A.T