By making a water's edge election, the multinational taxpayer can limit the reach of the unitary theory to U.S.-based factors and income.

Question

Quizplus · Accepted Answer

By choosing the water's edge election, the multinational taxpayer can limit the application of the unitary theory to only those factors and income that are based in the United States, rather than the global scope that would be covered under the traditional unitary approach. This can help to reduce tax liability and provide greater flexibility in managing international operations.

By Making a Water's Edge Election, the Multinational Taxpayer Can