True or False: Both individuals and companies have an Annual Exempt Amount (AEA) for capital gains.

True or False: Both individuals and companies have an Annual Exempt Amount (AEA) for capital gains.

• A. True
• B. False
• C. Only individuals have AEA
• D. Only companies have AEA

Answer: (B)

The statement is false because, in the context of capital gains tax, only individuals and certain trusts are entitled to an Annual Exempt Amount (AEA). Companies do not have an AEA for capital gains; instead, they are fully taxed on their capital gains without an exemption. This means that while individuals can benefit from a portion of their capital gains being exempt from tax due to the AEA, companies do not receive this benefit, leading to a different taxation treatment for capital gains for corporate entities compared to individuals.

The statement is false because, in the context of capital gains tax, only individuals and certain trusts are entitled to an Annual Exempt Amount (AEA). Companies do not have an AEA for capital gains; instead, they are fully taxed on their capital gains without an exemption. This means that while individuals can benefit from a portion of their capital gains being exempt from tax due to the AEA, companies do not receive this benefit, leading to a different taxation treatment for capital gains for corporate entities compared to individuals.