Final answer:
The broker is referring to D. income tax when using the expression "tax shelter". A tax shelter is a legal method used to reduce or avoid paying taxes.
Step-by-step explanation:
The broker is referring to income tax when using the expression "tax shelter" to an investor. A tax shelter is a legal method used to reduce or avoid paying taxes. It typically involves investing in certain assets or activities that provide deductions or credits to offset taxable income. By taking advantage of tax shelters, investors can lower the amount of income tax they owe to the government.
For example, a common type of tax shelter is investing in a retirement account like an individual retirement account (IRA) or a 401(k) plan. Contributions made to these accounts are often tax-deductible, meaning they reduce the investor's taxable income.