Overseas business activities conducted by U.S. corporations receive which one of the following favorable tax breaks?
A)Foreign subsidiaries of U.S. corporations are exempt from the U.S. corporate income tax unless they earn U.S.-source investment or trade or business income.
B)Foreign subsidiaries of U.S. corporations are always exempt from the U.S. corporate income tax even if they earn U.S.-source investment or trade or business income.
C)Domestic corporations conducting business in a foreign country through a branch office or facility can exempt non-U.S. income from the U.S. corporate income tax.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Foreign subsidiaries of U.S. corporations are exempt from the U.S. corporate income tax unless they earn U.S.-source investment or trade or business income. This is known as the "deferral provision" and allows U.S. corporations to defer paying taxes on income earned through their foreign subsidiaries until that income is brought back to the United States in the form of dividends or other payments.

Overseas Business Activities Conducted by U