Any Deduction Taken in a Prior Year That Is Recovered

question 133

True/False

Any deduction taken in a prior year that is recovered in a subsequent year is reported as income in the year it is recovered, to the extent that a tax benefit was received from the deduction.

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Definitions:

Gambler's Fallacy

The erroneous belief that if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future, or vice versa, in situations that are truly random.

Ignoring Base Rates

Ignoring base rates is a cognitive bias that involves disregarding or underestimating general information (base rates) in favor of specific individual information when making decisions or judgments.

Availability Bias

A cognitive bias that causes people to overestimate the likelihood of events based on their availability in memory, often leading to skewed decision-making.

Belief Perseverance

The tendency to cling to one's initial belief even after receiving new information that contradicts or disconfirms the basis of that belief.