Which of the Following Statements Is True

question 18

Multiple Choice

Which of the following statements is true?

• A)Income character determines the tax year in which the income is taxed.
• B)Income character depends on the taxpayer's filing status.
• C)Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income.
• D)A taxpayer selling a capital asset at a gain recognizes ordinary income.

---

Definitions:

COBRA

A federal law (Consolidated Omnibus Budget Reconciliation Act) that allows employees and their families to retain health insurance coverage after losing their job or experiencing a reduction in work hours.

Benefits

A range of privileges or advantages provided to employees or members, typically including health insurance, retirement plans, and paid time off.

Termination

The act of ending or concluding a contract, agreement, or employment.

Dependents

Individuals, often family members, who rely on another person's income for their financial support.