Using the Following Choices, Show the Justification for Each Provision

question 143

Multiple Choice

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations
b. Social considerations
c. Equity considerations
d. Both a. and b.
-A Federal deduction for state and local sales taxes paid.

• A)Deferral of gains from involuntary conversions
• B)Carryforward of net operating losses
• C)"No change" is a possible result
• D)State income tax applied to a visiting nonresident
• E)IRS special agent
• F)Undoing the "piggyback" result
• G)Ideal budget goal as to new tax legislation
• H)Every state that has a general sales tax has one
• I)Imposed by all states and the Federal government
• J)Imposed by some states but not the Federal government
• K)Imposed only by the Federal government
• L)No correct match provided

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Definitions:

Straight-Line Method

A method of calculating depreciation for an asset, spreading the cost evenly over its useful life.

Depreciation Expense

It is an accounting method of allocating the cost of a tangible asset over its useful life.

Residual Value

The estimated amount that an asset will realize upon its disposal at the end of its useful life.

Straight-Line Depreciation

A method of calculating the depreciation of an asset evenly over its useful life, assigning a fixed expense amount to every accounting period.