The income earned by an investment company is taxed: Select one: O a. at the corporate and individual levels. O b. through the stockholders' income tax returns. O c. as long term capital gains. O d. without consideration to the source of the income.

The income earned by an investment company is taxed: Select one: O a. at the corporate and individual levels. O b. through the stockholders' income tax returns. O c. as long term capital gains. O d. without consideration to the source of the income.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 18GI

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Concept explainers

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.

Question

A4)

The income earned by an investment company is taxed:
Select one:
O a. at the corporate and individual levels.
O b. through the stockholders' income tax returns.
O C.
as long term capital gains.
O d. without consideration to the source of the income.

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