Which of the following statements best describes the operation of subpart F as it applies to income earned by a foreign corporation?
A)Subpart F causes all income of a controlled foreign corporation to be treated as a deemed dividend to all U.S. persons owning stock in the corporation on the last day of the corporation's tax year.
B)Subpart F causes certain income of a controlled foreign corporation to be treated as a deemed dividend to all U.S. persons owning stock in the corporation on the last day of the corporation's tax year.
C)Subpart F causes certain income of a controlled foreign corporation to be treated as a deemed dividend to only those U.S. shareholders owning stock in the corporation on the last day of the corporation's tax year.
D)Subpart F causes all income of a controlled foreign corporation to be treated as a deemed dividend to only those U.S. shareholders owning stock in the corporation on the last day of the corporation's tax year.

Question

Quizplus · Accepted Answer

Subpart F income is only attributed to U.S. shareholders who own stock in the controlled foreign corporation on the last day of the corporation's tax year, and it applies only to certain types of income, not all income.

Which of the Following Statements Best Describes the Operation of Subpart