8. The tax system Understanding taxes Which source of investor income is susceptible to double taxation? Interest earned Dividends 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 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 taxable income. It Depreciation expenses directly affect a company's taxable income. An increase in depreciation expense will lead to a will tax deducted from a company's earnings, thus leading 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 Suppose a firm with the 25% tax rate needs to pay $1 in dividends to its shareholders. What is the pretax income it should have to pay this dividen $1.33 $1.00