Which of the Following Might Motivate a Taxpayer to Try

question 58

Multiple Choice

Which of the following might motivate a taxpayer to try to avoid like-kind exchange treatment?

• A) Taxpayer has unused NOL carryovers.
• B) Taxpayer has unused general business credit carryovers.
• C) Taxpayer has suspended or current passive activity losses.
• D) Only a. and b. are correct.
• E) a., b., and c. are correct.

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Definitions:

Reserve Requirement

The minimum fraction of customer deposits that each bank must hold as reserves, rather than lending out, as mandated by the central bank.

Simple Money Multiplier

A formula that determines the maximum amount of money that banks can create with a given level of reserves.

Excess Reserves

Banks' reserves that exceed the minimum required by the central bank, available for lending or investment.

Interest Rate

The price, expressed as a percentage of the principal, that a borrower must pay a lender for the use of funds.