Which of the Following Statements About Ordinary Income and Capital

question 14

Multiple Choice

Which of the following statements about ordinary income and capital gain is false?

• A)Every item of income is ultimately characterized as either ordinary income or capital gain for federal tax purposes.
• B)Most ordinary income items are taxed at the regular individual or corporate tax rates.
• C)Individuals and corporations pay tax on their capital gains at a preferential rate.
• D)None of the above is false.

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Definitions:

P(B)

The probability notation referring to the likelihood of event B occurring.

Independent

Not influenced by or contingent upon others; describes variables that operate without interference from other variables.

P(B|A)

The probability of event B occurring given that event A has already occurred, indicating a conditional probability.

P(A and B)

The likelihood of event A and event B happening simultaneously.