Because of the Locked-In Effect,high Capital Gains Tax Rates May

question 76

True/False

Because of the locked-in effect,high capital gains tax rates may discourage taxpayer's from selling appreciated capital assets.

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Definitions:

Income Tax Expense

The cost of taxes a company must pay based on its earnings, which can affect its net income and financial statements.

Income Tax Rate

The fraction of income that a business or individual must pay as tax.

After-Tax Discount Rate

The net discount rate applied to a project or investment after accounting for the effects of taxes.

Straight-Line Depreciation

An equal expense allocation method over the anticipated productive life of an asset.