Which of the Following Items Is Not a Permanent Book-Tax

question 114

Multiple Choice

Which of the following items is not a permanent book-tax difference?

• A)Tax-exempt life insurance proceeds.
• B)Nondeductible meals expense.
• C)Accrued vacation pay liability not paid within the first two and a half months of the next tax year.
• D)Excess tax benefits from the exercise of NQOs.

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Definitions:

Schedule D Transactions

Refers to a tax form used in the U.S. to report capital gains and losses from the sale, exchange, or disposition of capital assets.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. for tax purposes, allowing faster recovery of investments in certain property through depreciation deductions.

Depreciable Real Property

Real estate eligible for depreciation for tax purposes, meaning its cost can be deducted over a period of time.

Straight-Line Method

A method of calculating the depreciation of an asset that evenly spreads out its cost over its useful life.