Which of the following is an example of the conversion strategy?
A) A corporation paying its shareholders a $20,000 dividend
B) A corporation paying its owner a $20,000 salary
C) A high tax rate taxpayer investing in tax exempt municipal bonds
D) A cash-basis business delaying billing its customers until after year end
E) None of these

Question

Quizplus · Accepted Answer

Investing in tax-exempt municipal bonds is a conversion strategy because it converts taxable income into tax-exempt income, effectively reducing the investor's tax liability. The other options are not examples of conversion strategies.

Which of the Following Is an Example of the Conversion