1. Why does the United States require that repatriated foreign income be separated into baskets by type of income, with separate foreign tax credit limitations applied to each basket? Does the...

1. Why does the United States require that repatriated foreign income be separated into baskets by type of income, with separate foreign tax credit limitations applied to each basket? Does the presence of separate baskets increase the U.S. tax on foreign income?

2. Why might a firm wish to repatriate income from a subsidiary in a low-tax country? If it does so, is it advisable to repatriate income from a high-tax country at the same time? Why or why not?

3. What is the import of Section 482 for firms forming subsidiaries in foreign tax jurisdictions? Do taxpayers have much freedom in setting prices of goods and services that they transfer to and from their own subsidiaries?