Question

31. All of the following statement concerning the capital gain tax are correct except: a. The asset must be held for a year or longer to get capital gains treatment. b. The capital gain rates can be zero if the taxpayer's income is low enough. c. Capital gains treatment applies to stocks and bonds. d. The capital gains treatment is a second tax system that applies to taxpayers who have income that is too high and pay too little taxes. 32. Which of the following statements describes a statutory notice of deficiency? a. If after 90 days, the client has not paid the taxes that are assessed the IRS can seize property and garnish wages b. It allows the appeals agent to negotiate based on the risks and hazards of litigation. c. It is a letter sent by the IRS to settle a small dispute on an incorrect tax form such as a math error, or the absence of an appropriate schedule. d. It is the court in which the taxpayer does not have to pay the tax up front.

Answer 1

ANSWER 31- [A] The asset must be held for a year or longer to get capital gain treatment.

There will be Short term Capital Gain if asset is held for less then year

ANSWER 32- [C] It is the letter sent by IRS to settle small dispute on an incorrect tax from such as a math error or the absense of an appropriate schedule