Which of the following statements regarding the foreign operations of Gem Corp., a U.S. Corporation, is correct?

A) Gems earnings from its foreign operations are not subject to U.S. Income tax

B) Gem may take a deduction, but not a credit, for the income taxes paid to a foreign country

C) Gem may take a credit, but not a deduction, for the income taxes paid to a foreign country

D) Gem may take either a deduction or a tax credit, but not both, for the income taxes paid to a foreign country