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Three Alternative Business Entities, Cynthia A. Nemec

Honors Capstones

The purpose of this paper is to provide a basic explanation of how three alternative business entities are taxed in the U.S. on their foreign-source earned income. The three entities that will be discussed include: (1) a division or branch of a U.S. corporation; (2) a subsidiary incorporation in a foreign country; and (3) an exporter of goods manufactured in the U.S. Additionally, the effect international tax treaties have on the taxation of these entities will also be discussed.