Identify Which of the Following Statements Is True

question 77

Multiple Choice

Identify which of the following statements is true.

• A)For expenses incurred after December 31, 2017, no deduction is allowed for any activities involving entertainment, amusement, or recreation, including expenses related to a facility used in connection with these activities.
• B)The Dividends Received Deduction for individuals is limited to 50%.
• C)Domestic Production Activities Deduction carry overs that originated from pre 2018 tax years are limited to 50% of taxable income until 2025.
• D)Deductibility of business interest in a given year is limited to 80% of adjusted taxable income.

---

Definitions:

Fair Value

The estimated market value of an asset or liability, based on current prices in an open and competitive marketplace.

Equity Method

A method of accounting for investments in which the investment is initially recorded at cost and subsequently adjusted for the investor’s share of the investee’s net income or losses and dividends received.

Significant Influence

It refers to the power to participate in the financial and operating policy decisions of an investee but not control those policies.

Trading Security

A financial asset that is bought and sold with the intention of generating profits from short-term fluctuations in its price.