The tax law requires that capital gains and losses be separated from other types of gains and losses. Among the reasons for this treatment are: a."Long-term capital gains may be taxed at a lower rate than ordinary gains" and "Net capital loss is deductible only up to $3,000 per year for individual taxpayers". b.Short-term capital losses are not deductible. c.Net capital loss is deductible only up to $3,000 per year for individual taxpayers. d.Long-term capital gains may be taxed at a lower rate than ordinary gains.

Q: TRUE OR FALSE? 1st statement: Interest income must be included in the computation of gross income if…

A: Gross Income: The entire earnings a person obtains before taxes and other deductions are referred to…

Q: Deferred tax assets and deferred tax liabilities represent the tax effect of the temporary…

A: Temporary differences are those differences which are there in between carrying value of asset or…

Q: Which of the following would result in the recognition of deferred tax liabilities? Select one: A.…

A: DTT (Deferred tax liability) which is recorded in the balance sheet (BS) of company and it reports…

Q: A taxpayer received Form 1099-A with box 5 checked, indicating recourse debt. This informs the tax…

A: Form 1099-A includes the particulars relating to transfer of a property that is already disclosed.

Q: Which of the following is correct

A: All capital gains are not capital assets. Taxpayers not remits tax to government. Exempt from income…

Q: taxable income

A: Income tax is payable by every person that crosses the tax-exempted threshold. However, various…

Q: Which of the following is false? a.    Under GAAP, deferred taxes are reported based on the…

A:

Q: True/False   1. Exclusions are the amounts, which the law allows to be deducted from gross income in…

A: The basic meaning of exclusion is the amount of income which do not form part of Gross Income…

Q: The benefit of future deductible amounts can be achieved only if future income is sufficient to take…

A: Temporary Difference Temporary difference refers to the difference of one income recognized by the…

Q: No deductions shall be allowed where the transaction is between “related taxpayers” under Sec. 36(B)…

A: Solution Concept As per the provision of the Tax Code The interest expense in not allowed for…

Q: Where the carrying amount of an asset or liability is different from the tax base a ‘temporary…

A: Temporary difference is occurre in one period and shall be reverse in subsequent period for tax…

Q: 1.The definition of gross income in the tax law is: A. All items specifically listed as income in…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: A net operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit…

A: Definition:   Net Operating Loss Carryforward: The net operating loss is considered a negative…

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Q: Indicate which of the following statements on the taxation of income from real estate under Personal…

A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Deferred tax liabilities should be treated as equity when:A . they are not expected to reverse.B .…

A: Deferred tax liability: Deferred tax liability is a tax that is measured or is outstanding for the…

Q: Listed below are items that are commonly accounted for differently for financial reporting purposes…

A: Financial accounting refers to the accounting which helps in keeping a logical as well as systematic…

Q: TRUE OR FALSE? If the carrying amount of a liability is higher than the tax base, the difference is…

A: The given statement is True...If the carrying amount of a liability is higher than the tax base, the…

Q: Which of the following statements is true? Deductions are amounts allowed by the NIRC to be deducted…

A: Losses from wagering transactions shall be allowed only up to the extent of the gains from such…

Q: Of the following temporary differences, which one ordinarily creates a deferred tax asset? O…

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Q: All are true except:   a. OSD is a substitute for itemized deduction. b. The OSD relieves the…

A: A company's financial statements are a collection of summaries of its monetary performance,…

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A: Capital gain is the revenue generated from selling the assets either long term assets and short term…

Q: TRUE OR FALSE? 1. An excess tax depreciation will result to a deferred tax liability. 2. If the…

A: 1.An excess tax depreciation will result to a deferred tax liability-The given statement is False..…

Q: Which of the following statements BEST describes an important tax planning opportunity with regard…

A: Income earned by the individual and businesses is subject to a charge levied by the government that…

Q: Lump sum payments in respect of the termination of employment of a person may be relieved from tax.…

A: Lump sum payments paid to an employee by an employer as a form of reward in regard for the services…

Q: Recognition of tax benef

A: Deferred tax assets comprise future tax benefits that a firm anticipates obtaining as a result of…

Q: An unused tax loss will arise when:   a. Expenses deductible for tax purposes are less than the…

A: Taxable income is the one upon which a tax percentage is charged as per the tax bracket to be paid…

Q: Which of the following results to a deferred tax liability? When the carrying amount of an asset is…

A: Solution: "None of the choices" results to a deferred tax liability. this is because When the…

Q: A net operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit…

A: Net Operating Loss Carry forward:The net operating loss is considered as negative taxable income.…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.