1. What is the difference between a direct foreign tax credit and an indirect (deemed paid) foreign tax credit? 2. What is Subpart F income? How does the taxation of Subpart F income affect the...

1. What is the difference between a direct foreign tax credit and an indirect (deemed paid) foreign tax credit?

2. What is Subpart F income? How does the taxation of Subpart F income affect the ability of U.S. corporations to defer U.S. taxation on income earned by controlled foreign corporate subsidiaries?

3. Under what conditions will foreign tax credits result in a U.S. corporation paying exactly the same tax on foreign income as it would if this income were earned directly in the United States?

 4. Does your answer to the prior question depend on whether the investment funds come from earnings and profits or from new investment dollars? Explain.

5. Do low tax rates in a foreign country imply that expected after-tax rates of return on marginal investments should be higher than those on domestic investments? Explain.