Using the Following Choices, Show the Justification for Each Provision

question 3

Multiple Choice

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations
b. Social considerations
c. Equity considerations
d. Both a. and b.
-Discriminant Index Function (DIF)

• A)Deferral of gains from involuntary conversions
• B)Carryforward of net operating losses
• C)"No change" is a possible result
• D)State income tax applied to a visiting nonresident
• E)IRS special agent
• F)Undoing the "piggyback" result
• G)Ideal budget goal as to new tax legislation
• H)Every state that has a general sales tax has one
• I)Imposed by all states and the Federal government
• J)Imposed by some states but not the Federal government
• K)Imposed only by the Federal government
• L)No correct match provided

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Definitions:

Articles of Incorporation

A legal document that establishes a corporation's existence, filed with a governmental body in the jurisdiction where the corporation is headquartered.

Double Taxation

A situation where the same income is taxed twice: first at the corporate level on profits, and then again at the shareholder level on dividends received.

Dividends

Dividends are a portion of a company's earnings distributed to its shareholders as a reward for their investment.

Tax-exempt Shareholders

Shareholders or investors who do not have to pay income taxes on the dividends received from their investments, often applied to certain types of institutional investors.