AT&T; LTE 7:15 PM dbu.blackboard.com Question Completion Status: QUESTION 26 10

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AT&T; LTE 7:15 PM dbu.blackboard.com Question Completion Status: QUESTION 26 10 points Save Answer A method by which one can avoid obtaining recognized income is through the use of debt. True False QUESTION 27 10 points Save Answer Accelerating the recognition of income and delaying the recognition of deductions is generally a beneficial tax planning technique True False QUESTION 28 10 points Save Answer Click Save and Submit to save and submit. Click Save Al Answers to save all answers Save All Answers Close Window Save and Submit

Explanation / Answer

Question 26 : True, One can avoid recognizing income through the use of debt. Since neither the borrowing of money nor the receipt of funds that previously were loaned generates gross income, taxpayers sometimes can use loans to avoid the recognition of taxable income and enjoy the temporary use of the cash.

Question 27 : False, Delaying the recognition of Income and accelerating the recognition of deductions is generally a beneficial tax planning technique.

Question 28 : False, All taxes are not same throughout the United States

Question 29 : False. the character of income is material for calculating tax liability as there are different tax rates for different type of income. For example Long term capital gain, Dividend Income etc.

Question 30 : True, related parties tax planning is not effective due to recognition of income at the arm's length price.

Question 31 : True, IRS has the power in certain situations to reallocate both income and deductions among certain related taxpayers.

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