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How is operating leverage related to cost structure?
Adjusted Basis
The value of an asset for tax purposes, calculated by modifying the original cost with improvements, depreciation, and other factors.
Passive Activity
An economic activity in which the taxpayer does not materially participate, often referring to certain rental activities or business ventures.
Tax Preference Items
Certain types of income, deductions, or credits that are treated favorably under the tax code to encourage specific activities or investments.
Nonrecourse Debt
A type of loan where the lender's recovery options in case of default are limited to seizing the collateral securing the loan, without pursuing further compensation from the borrower.
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