Which, If Any, of the Following Provisions of the Tax

question 118

Multiple Choice

Which, if any, of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS) ?

• A)Penalties are imposed for failure to file a return or pay a tax on time.
• B)Prepaid income is taxed in the year received, not in the year earned.
• C)Annual adjustments for indexation increases the amount of the standard deduction allowed.
• D)Personal casualty losses in Federally declared disaster areas must exceed 10% of AGI to be deductible.
• E)A deduction is allowed for charitable contributions.

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk, which cannot be eliminated through diversification.

Characteristic Line

A line generated in a graphical representation of the returns on a security versus the returns on the market, used to assess risk.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance.

Variance

A statistical measurement of the dispersion between numbers in a data set, measuring how far each number in the set is from the mean.