Which of the Following Statements About the Individual Capital Gains

question 78

Multiple Choice

Which of the following statements about the individual capital gains and losses is false?

• A) Gain on sale of Section 1231 depreciable real property is taxed at a 25% maximum rate.
• B) Short-term capital gains are taxed as ordinary income.
• C) Capital losses are deductible only against capital gains.
• D) Nondeductible capital losses are carried forward for deduction against future capital gains.

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Definitions:

Private Enterprise System

A private enterprise system is an economic system where businesses are owned and operated by private individuals or companies, with minimal government intervention.

Economic Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.

Business Cycle

The natural fluctuation of economic activity over time, marked by periods of expansion, peak, contraction, and trough.

Recovery Stage

A phase in the economic cycle or in the lifecycle of a project where performance begins to improve after a period of decline or recession.