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To determine current E & P, taxable income must be increased for any involuntary gains and...

To determine current E & P, taxable income must be increased for any involuntary gains and reduced for losses.

True or False? Please explain.

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Answer #1

Answer- True

Explanation-As per IRS,taxable income must be increased for any involuntary gains and reduced for losses.It is standardise.

for example, an investor holds a stock for five years and sells the shares for a $20,000 gain. Since the stock was held for more than one year, the gain is considered any capital losses reduce long term and the tax base of the gain. After deducting losses, the tax base of the capital gain is multiplied by capital gain tax rates.

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