Which of the Following Is Not a Tax Advantage of a Series

question 49

Multiple Choice

Which of the following is not a tax advantage of a Series EE savings bond?

• A)Taxes are paid as the original issue discount on the bond is amortized.
• B)Interest earned is exempt from state taxation.
• C)Taxes are deferred until the bond is cashed in at maturity.
• D)Interest is exempt from federal taxation when used for qualifying educational expenses.
• E)None of the choices are correct.

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Definitions:

Commercial Substance

A concept in accounting indicating that a transaction has caused a significant change in the economic circumstances of a business.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its life.

Timberlands

Timberlands refer to forested land suitable for timber harvesting and logging operations.

Accumulated Depletion

The total amount of natural resource extraction that has been charged as an expense to a company's profit and loss account over a period.