What Form Must a Taxpayer File If He or She

question 50

Multiple Choice

What form must a taxpayer file if he or she is at-risk in an activity?

• A)Form 6198.
• B)Form 4797.
• C)Form 8582.
• D)Form 1040,Schedule D.

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Definitions:

Equity

Equity refers to fairness or justice in the way people are treated and involves ensuring equal opportunities and rights for all individuals.

Benefits Principle

A theory in taxation where taxes are apportioned according to the benefits received by taxpayers; those who benefit more from government services, pay more taxes.

Federal Government

The national government of a federal country, which holds the authority over matters that affect the country as a whole.

Horizontal Equity

The principle that individuals with similar incomes or circumstances should be taxed at the same rate.