Final answer:
The terms 'realized gain' and 'recognized gain' are not interchangeable; the former refers to the profit from a sale, while the latter refers to the portion of the profit that is taxable. For the synonym of 'hypothesis,' the word 'suggestion' is the closest in meaning.
Step-by-step explanation:
The statement that 'realized gain' and 'recognized gain' can be used interchangeably and mean the same thing . A realized gain occurs when an asset is sold for more than its original purchase price. However, this gain might not always be recognized for tax purposes at the time of the sale. A recognized gain is the amount of the realized gain that is subject to taxation in the year the asset is sold. The determination of a recognized gain depends on several factors such as tax laws, the nature of the asset, and the period of ownership.
The other question regarding which word is closest in meaning to 'hypothesis' would be suggestion (d). A hypothesis is a proposed explanation for a phenomenon made as a starting point for further investigation. It is therefore not a confirmed fact, law, or conclusion, and is more than just a formula; it is a tentative insight that requires testing.
Realized gain refers to the amount of profit or gain generated from the sale of an asset, such as stocks or property. It represents the difference between the original cost basis and the sale price. However, realized gain does not necessarily mean the gain is taxable.
Recognized gain, on the other hand, is the portion of the realized gain that is subject to taxation. The recognition of gain occurs when the taxpayer reports the gain on their tax return. It takes into account various factors such as holding period, type of asset, and applicable tax laws.