In a tax shelter investment, phantom income and turnaround are most likely to be attributable to which of the following?

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Quizplus · Accepted Answer

Phantom income and turnaround are most likely to be attributable to deferral because deferral allows investors to postpone paying taxes on income until a later date. This can create a situation where investors have income that is not taxed, but they still have the cash flow from the investment. This can lead to phantom income, which is income that is not taxed but is still reported on the investor's tax return. Turnaround is a situation where an investment that was initially losing money starts to make money. This can be caused by a number of factors, but one common factor is deferral. Deferral can allow investors to hold onto an investment for longer than they would otherwise be able to, which can give the investment time to turn around.

In a Tax Shelter Investment, Phantom Income and Turnaround Are