Match Each Statement with the Correct Term Below

question 10

Multiple Choice

Match each statement with the correct term below.
-Related party

• A)Taxpayer reports income when received in cash or its equivalent and takes deductions as they are paid.
• B)A deduction taken in one year that is recovered in a later year is reported as income in the year of recovery to the extent that the deduction reduced taxable income.
• C)Taxpayer reports income as earned and deductions as incurred.
• D)The result of an arms-length transaction.
• E)Exclusions and deductions result from specific acts of Congress that must be strictly applied and interpreted.
• F)The taxability of a transaction is determined by the reality of the transaction rather than some contrived appearance.
• G)The reporting of an item of income or expense on a tax return
• H)No income is realized until the taxpayer's invested capital is recovered.
• I)All income received is taxable unless some specific provision of the tax law allows exclusion of the item.
• J)These taxpayers are not deemed to transact at arms-length.

---

Definitions:

Private Equity

Investment capital that is not listed on a public exchange, invested in companies that are typically private with the aim of achieving high returns.

Intrinsic Value

The actual, inherent value of a security, determined through fundamental analysis without reference to its market value.

Unfriendly Merger

A type of acquisition or merger that takes place without the target company's consent or agreement, often involving hostile tactics.

Hostile Takeover

An acquisition attempt by a company by going directly to the company's shareholders or fighting to replace management to get the acquisition approved.