Which of the Following Statements Best Describes the Tax System

question 45

Multiple Choice

Which of the following statements best describes the tax system?

• A) Since companies can deduct dividends paid but not interest paid, such a tax system favours the use of equity financing over debt financing.
• B) Interest paid to an individual is counted as income for tax purposes and taxed at the individual's regular tax rate.
• C) The maximum federal personal tax rate in 2009 is 35%.
• D) Ordinary corporate operating losses can be carried back to each of the preceding 10 years and forward for the next 3 years and used to offset taxable income in those years.

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