Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the income tax expense arising from capital investment projects?

Question

Quizplus · Accepted Answer

Depreciation deduction can be used to reduce the amount of income tax expense arising from capital investment projects. This is because under the Internal Revenue Code, businesses are allowed to deduct a portion of the cost of the asset each year, based on its useful life, as an expense on their income tax return. This reduces the taxable income of the business, thereby reducing its income tax liability. The other options listed (A, C, and D) may also provide tax benefits, but are not specifically related to capital investment projects.

Which of the Following Provisions of the Internal Revenue Code