3rd Drop down options:

under Italy *Incorrect*

under U.S

partially by both Italy's and U.S

USCo incorporated its foreign branch operations in Italy by transferring the branch's assets to a foreign corporation in return solely for stock in the new corporation. All of the branch's assets are located outside the United States and are used in the active conduct of a foreign trade or business. Is this transaction eligible for tax deferral under $351 ? .351 deferral is available because the assets left the U.S. taxing jurisdiction; this is the sort of transaction to which 367 likely would . usco's realized gains and losses for the branch assets likely are taxed x income tax law in the year of the incorporation