Which,if Any,of the Provisions in the Tax Law Enumerated Below

question 57

Multiple Choice

Which,if any,of the provisions in the tax law enumerated below cannot be justified under the wherewithal to pay concept?

• A)The taxation of prepaid income in the year of receipt and not in the year it is earned.
• B)The installment method for reporting gain on the sale of property.
• C)The nontaxability of a like-kind exchange.
• D)The disallowance as a deduction of certain fines and penalties imposed for the violation of certain laws.
• E)The rules governing the formation of corporations.

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Definitions:

Reverse Stock Split

A consolidation of existing shares into fewer, higher-priced shares, reducing the total number of outstanding shares without changing the company's market capitalization.

Stock Exchange

A marketplace where securities, including stocks and bonds, are bought and sold.

Listing Requirements

The set of conditions imposed by a stock exchange on companies that want to list their shares for trading, which may include financial thresholds and corporate governance standards.

Clientele Effect

A theory suggesting that the stock price movements of a company are influenced by the tax preferences and dividend policies preferred by its current shareholders.