Which of the Following Is a Feature That Typically Distinguishes

question 23

Multiple Choice

Which of the following is a feature that typically distinguishes a savings account from a checking account?

• A) pays interest
• B) less liquidity
• C) automatic teller machine access is available for checking accounts
• D) withdrawals require a trip to the bank by the account holder

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Definitions:

Like-kind Exchange

A tax deferment strategy allowing for the exchange of similar types of properties without the immediate tax implications of selling the property.

IRC Section 121

A provision in the Internal Revenue Code that allows for the exclusion of up to $250,000 ($500,000 for married couples filing jointly) of capital gains from the sale of a primary residence.

Principal Residence

The primary location that a person inhabits. It often qualifies for specific tax benefits, such as the exclusion of gain from its sale.

Installment Method

A tax method that allows income from sales to be reported for tax purposes when the payment is received, rather than at the point of sale.