Which of the Following Statements Regarding Exclusions And/or Deferrals Is

question 30

Multiple Choice

Which of the following statements regarding exclusions and/or deferrals is false?

• A)Exclusions are favorable because taxpayers never pay tax on income that is excluded.
• B)Interest income from municipal bonds is excluded from gross income.
• C)Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year.
• D)An income item need not be realized in order to qualify as an exclusion item.

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Definitions:

Pica

An eating disorder characterized by the consumption of non-food items, such as dirt or paper.

Hunter's Syndrome

A rare genetic disorder that affects the body's ability to break down certain sugars, leading to progressive damage over time.

Hypoglycemia

Abnormally low glucose levels.

Type 2 DM

Type 2 Diabetes Mellitus, a chronic condition that affects the way the body processes blood sugar (glucose), characterized by high blood sugar, insulin resistance, and relative lack of insulin.