An Individual Taxpayer Who Is Self-Employed and an Active Investor

question 51

Multiple Choice

An individual taxpayer who is self-employed and an active investor has qualified for foreign tax credits,nonrefundable personal tax credits and general business credits.Because he knows there are differing limitations on the application of these credits,with resulting interrelated aspects,he wants to know the appropriate order for their application.The appropriate order of the application of these three classes of tax credits is as follow:

• A)(1)foreign tax credits; (2)general business credits; (3)nonrefundable personal tax credits.
• B)(1)general business credits; (2)foreign tax credits; (3)nonrefundable personal tax credits.
• C)(1)foreign tax credits; (2)nonrefundable personal tax credits; (3)general business credits.
• D)(1)nonrefundable personal tax credits; (2)foreign tax credits; (3)general business credits.

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Definitions:

Floating Exchange Rate

An exchange rate determined by the demand for and the supply of a nation’s currency.

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold; countries committed to convert paper money into a fixed amount of gold upon request.

Gold Exchange Standard

A monetary system in which countries peg their currencies to a specific amount of gold but may also hold foreign currencies in reserves.

Euro

The official currency of 19 of the 27 European Union countries, which is used by over 340 million Europeans. The euro aims to facilitate a single European market, foster economic stability, and promote economic integration among its members.