The More-Likely-Than-Not Standard

question 30

Multiple Choice

The more-likely-than-not standard

• A)is based on a more-than 50 percent probability.
• B)applies only to contested liabilities
• C)is used to determine if a deferred tax liability should be recognized.
• D)is spelled out in APB 23.

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Definitions:

Tax Bracket

A range of incomes taxed at a particular rate under a progressive tax system.

Capital Asset

An asset held by an individual or business for investment or personal purposes, excluding inventory or assets sold in the ordinary course of a business.

Rental Property

A property owned by an individual or entity that is rented out to tenants in exchange for monthly rent payments.

Section 1245

A provision in the U.S. tax code that treats the gain from the sale of certain types of property (primarily depreciable personal property) as ordinary income rather than capital gain.