8. The tax system Understanding taxes Which source of investor income is susceptible to double taxation? Dividends Interest earned You bought 1,000 shares of Tund Corp. stock for $60.59 per share and sold it for $82.35 per share after a few years. How will your gain or loss be treated when you file your taxes? As a capital gain taxed at the long-term tax rate As a capital gain taxed at the current ordinary-income tax rate Depreciation expenses directly affect a company’s taxable income. An increase in depreciation expense will lead to a taxable income. It 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 . Which of the following cash outflows cannot be deducted from the operating income to derive the taxable income? Dividends paid Interest paid