Which of the Following Statements Regarding Exclusions And/or Deferrals Is

question 84

Multiple Choice

Which of the following statements regarding exclusions and/or deferrals is false?

• A) Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year.
• B) Exclusions are favorable because taxpayers never pay tax on income that is excluded.
• C) Interest income from municipal bonds is excluded from gross income.
• D) An income item need not be realized in order to qualify as an exclusion item.

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Definitions:

Retrospective Study

A research design that looks back in time to analyze data from past records to investigate a particular outcome or phenomenon.

Prospective Study

A research design that follows participants forward in time to examine the relationship between specific exposures and outcomes.

Clinical Trial

A research design that tests the effects of medical treatment. Many clinical trials are randomized controlled trials that allow researchers to determine whether a new treatment is or is not effective.

Ex Post Facto Study

A research design that examines the effects of an independent variable on a dependent variable, where the study is conducted after the events have occurred.