In which of the following cases are the U.S.shareholders in a controlled foreign corporation (CFC) deferring U.S.tax on the CFC's income?
A) The CFC operates in a jurisdiction with a tax rate higher than the U.S.rate,has no subpart F income,and pays no dividends.
B) The CFC operates in a jurisdiction with a tax rate lower than the U.S.rate,has no subpart F income,and pays no dividends.
C) The CFC operates in a jurisdiction with a tax rate lower than the U.S.rate,and 100% of the CFC's income is subpart F income.
D) The CFC operates in a jurisdiction with a tax rate higher than the U.S.rate,and distributes 100% of after-tax earnings as dividends.
Correct Answer:
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