8. The tax system Aa Aa Understanding taxes In general, is the U.S. federal tax system progressive or regressive? Progressive Regressive You bought 1,000 shares of Tund Corp. stock for $75.00 per share and sold it for $77.25 per share within the same year. How will your gain or loss be treated when you file your taxes? As a capital gain taxed at the current ordinary-income tax rate As a capital gain taxed at the long-term tax rate Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a taxable income. It will tax deducted from a company's earnings, thus ing to a operating cash flow. If a taxpayer is liable to pay $8,950 under AMT law but $7,500 according to the regular tax system, the taxpayer will need to pay taxes according to the To offset taxable income in a given year, ordinary corporate operating losses can be: Carried back for 2 years and carried forward for 20 years Carried back for 5 years and carried forward for 10 years Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a taxable income. It will tax deducted from a company's earnings, thus leading to a higher operating cash flow. lower Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a taxable income. It will tax deducted from a company's earnings, thus leading to a operating cash flow. decrease increase Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a taxable income. It will tax deducted from a company's earnings, thus leading to a operating cash flow. lower higher If a taxpayer is liable to pay $8,950 under AMT law but $7,500 according to the regular tax system, the taxpayer will need to pay taxes according to the Regular tax system Alternative Minimum Tax (AMT) system