Which of the following statements about the foreign tax credit is true?
A. By permitting a foreign tax credit, the U.S. relinquishes its taxing jurisdiction on foreign source income earned by U.S. corporations to the extent that income is taxed by a foreign jurisdiction.
B. The foreign tax credit allows U.S. companies to defer U.S. tax on foreign source income.
C. The foreign tax credit is available to foreign corporations doing business in the U.S.
D. The foreign tax credit is allowed for all types of foreign taxes.
Answer: A
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