Which of the Following Statements About Tax Basis Is False

question 95

Multiple Choice

Which of the following statements about tax basis is false?

• A) The tax basis in an asset can never be negative.
• B) Tax basis represents the taxpayer's unrecovered dollars invested in the asset.
• C) Tax basis reflects the asset's fair market value.
• D) Every asset owned by the taxpayer has a tax basis.

---

Definitions:

James-Lange Theory

A theory suggesting that emotions occur as a result of physiological reactions to events.

Two-factor Theory

A psychological theory that posits that emotions are based on two factors: physiological arousal and cognitive labeling of that arousal.

Schachter-Singer Theory

A theory of emotion that states emotions are determined by physiological arousal and its interpretation, based on environmental cues.

Cannon-Bard Theory

A theory of emotion that proposes emotions and physiological responses occur simultaneously and independently.