The payor of passive income subject to final tax is required to withhold the tax from the payment due the recipient. The withholding of the tax has…

The question

The payor of passive income subject to final tax is required to withhold the tax from the payment due the recipient. The withholding of the tax has the effect of: (2011 Bar Question)

1. A.a final settlement of the tax liability on the income.
2. B.a credit from the recipient's income tax liability.
3. C.consummating the transaction resulting in an income.
4. D.a deduction in the recipient's income tax return.

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