Using the Following Choices, Show the Justification for Each Provision

question 68

Multiple Choice

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations
b. Social considerations
c. Equity considerations
d. Both a. and b.
-A tax credit for amounts spent to furnish care for children while the parent is at work.

• A)Deferral of gains from involuntary conversions
• B)Carryforward of net operating losses
• C)"No change" is a possible result
• D)State income tax applied to a visiting nonresident
• E)IRS special agent
• F)Undoing the "piggyback" result
• G)Ideal budget goal as to new tax legislation
• H)Every state that has a general sales tax has one
• I)Imposed by all states and the Federal government
• J)Imposed by some states but not the Federal government
• K)Imposed only by the Federal government
• L)No correct match provided

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Definitions:

Convertible Bonds

Financial instruments that can be converted into a specified number of common stock shares at the discretion of the bondholder, usually at certain times during their life.

Control

The power to influence or direct people's behavior or the course of events.

Warrants

Financial instruments allowing the holder to choose to purchase or sell an asset at a predetermined price prior to a specified deadline, without being required to do so.

Call Options

Financial derivatives that give the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.