Investors considering switching capital assets may also consider the potential tax liability and decide not to switch.This is known as bracket creep.

Question

Quizplus · Accepted Answer

The statement describes a concept related to taxes influencing investment decisions, but it inaccurately defines "bracket creep." Bracket creep refers to the phenomenon where inflation increases income and pushes taxpayers into higher tax brackets, increasing their tax liability without an actual increase in real purchasing power. The scenario described is more related to capital gains tax considerations rather than bracket creep.

Investors Considering Switching Capital Assets May Also Consider the Potential