Which of the Following Is a True Statement About the Limitation

question 42

Multiple Choice

Which of the following is a true statement about the limitation on business interest deductions?

• A)Interest disallowed by this limitation is carried back three years and then forward five years.
• B)The limitation is calculated as a percentage of the taxpayer's total taxable income.
• C)This limitation is not imposed on businesses with average annual gross receipts of $25 million or less for the prior three taxable years.
• D)All of the choices are false.
• E)All of the choices are true.

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Definitions:

Performance Claim

A statement or assertion regarding the effectiveness or efficiency of a product, service, or process, often used in advertising or contractual agreements.

Loss Leader Selling

A practice of selling goods not for profit but to advertise or to attract customers to a place of business.

Competition Act

Laws designed to avoid monopolistic behaviors in the market to guarantee fair play among competitors.

Offence

An offence is a violation of law or rule, constituting an act that is forbidden by statute or is considered morally wrong or objectionable.