Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) Unrealized capital gains are taxable.
• B) Realized capital gains are taxable.
• C) Tax-exempt investments are attractive to individuals with high tax liabilities.
• D) Returns comparisons should be made on an equivalent tax basis.
• E) Tax exempt investors prefer tax exempt investments.

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Definitions:

Social Regulations

Rules imposed by government to regulate the impact of business activities on public health, safety, the environment, and social welfare.

Rational Basis Review

A legal standard used by courts to evaluate the constitutionality of a statute or ordinance, where the government only needs to show that the law is rationally related to a legitimate government interest.

Equal Protection

The constitutional guarantee that no person or group will be denied the same protection of the laws that is enjoyed by other similarly situated individuals.

Taxing Power

The legal authority granted to governmental entities to impose taxes on individuals and organizations to raise revenue for public purposes.