Which of the Following Is True Concerning the Corporate Taxation

question 25

Multiple Choice

Which of the following is true concerning the corporate taxation of insurance premiums and the treatment of uninsured losses?

• A)both premiums and expected losses are deductible at the beginning of the year
• B)uninsured losses are deductible only when they occur and premiums are deductible in the year paid
• C)since payments for insured losses are 100% tax deductible, commercial insurance is economically inefficient
• D)losses paid under the deductible amount are not tax deductible because the insured assumed the losses

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Definitions:

Equal Payments

Regularly scheduled payments that are the same amount over a given period, commonly used in loans and mortgages.

Combined Equivalent

This term suggests a concept related to combining various elements to yield an equivalent value or function, but without specific context, its exact definition could vary widely.

Scheduled Payments

Predetermined payments made at regular intervals, such as monthly or annually, often related to a loan or mortgage.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.