In the Exempt Model,
A)investment earnings are taxed currently.
B)investment earnings are exempt from explicit taxation.
C)investment earnings are taxed at the end of the investment period.
D)the initial investment is deductible or excludable from gross income,and the investment earnings are taxed at the end of the investment period.

Question

Quizplus · Accepted Answer

In the Exempt Model, investment earnings are exempt from explicit taxation. This means that the investor does not have to pay taxes on the investment earnings as they are earned but may have to pay taxes on the principal amount when it is withdrawn.