Long-Term Investors Can Defer Capital Gains Tax Until They Sell

question 28

True/False

Long-term investors can defer capital gains tax until they sell, and therefore, there is a tax advantage for share repurchases over dividends.

---

Definitions:

Initial Investments

The upfront capital or resources expended to start a project, acquire an asset, or establish a business.

Income Taxes

Taxes imposed by the government on the income earned by individuals and corporations.

Working Capital

The difference between a company's current assets and current liabilities, indicating the available short-term resources to fund operations.

Income Tax Rate

The percentage of an individual or company's income that is paid to the government as tax.