Which of the following statements regarding foreign persons not engaged in a U.S.trade or business is true?

Question

Quizplus · Accepted Answer

Foreign persons are subject to potential withholding taxes on the gross amount of U.S.-source investment income. This means that taxes may be withheld by the U.S. government before the income is paid to the foreign person. However, the exact amount of taxes withheld may vary depending on the specific circumstances and any applicable tax treaties. The other statements are incorrect - foreign persons may still be subject to U.S. tax on certain types of income even if they are not engaged in a U.S. trade or business, and there is no automatic exemption for foreign persons with only U.S.-source investment income.

Which of the Following Statements Regarding Foreign Persons Not Engaged