Allowing an Investment Toincrease in Value Without Selling It Is

question 19

Multiple Choice

Allowing an investment toincrease in value without selling it is an example of tax planning by:

• A)changing the timing of recognition of taxable income
• B)changing the character of income
• C)spreading income among related parties
• D)none of these are correct

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Definitions:

Present Value Factors

Multipliers used to calculate the present value of a sum to be received in the future by accounting for time value of money.

Minimum Rental Payments

The lowest amount of payment due under a lease agreement, which includes both the principal and interest components for a lease.

Latest Balance Sheet

The most recent statement of a company’s financial position, showing assets, liabilities, and equity at a specific point in time.

Succeeding Fiscal Years

The periods following the current fiscal year, typically referring to future financial or budgetary planning years.