9. Problems and Applications Q4 When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the asset, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not. When capital gains taxes are lowered, the investor has a incentive to sell the investment. Cuts in capital gains tax rates can raise tax revenue if the lower tax rate the volume of trade transactions by a large enough margin.

9. Problems and Applications Q4 When someone owns an asset (such as a share of stock) that rises in value, he has an "accrued" capital gain. If he sells the asset, he "realizes" the gains that have previously accrued. Under the U.S. income tax, realized capital gains are taxed, but accrued gains are not. When capital gains taxes are lowered, the investor has a incentive to sell the investment. Cuts in capital gains tax rates can raise tax revenue if the lower tax rate the volume of trade transactions by a large enough margin.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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