A High Tax Bracket Individual Can Enhance the Avoidance of Income

question 28

True/False

A high tax bracket individual can enhance the avoidance of income taxes through a C corporation by having the corporation retain its after tax earnings so that when the individual dies, his or her heirs can liquidate the corporation and realize little to no gain because of a step-up in basis.

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Definitions:

Units-of-production Depreciation

A method of depreciation that allocates an asset's cost based on its usage, units produced, or hours operated during a fiscal period.