Final answer:
Interest expense cannot typically be claimed against taxable capital gains, making the statement false. While both can affect a financial situation, they are treated separately for tax purposes.
Step-by-step explanation:
Interest expenses cannot typically be claimed against taxable capital gains. Capital gains are the profits from the sale of an asset, while interest expense is the cost of borrowing money. In most cases, capital gains are treated separately from other types of income and cannot be reduced by interest expenses, which are generally deducted from ordinary income.
While interest expense can impact the overall financial situation, leading to a higher deficit due to increased interest payments as debt grows, it does not directly influence the calculation of taxable capital gains. The statement that interest expense can be claimed against taxable capital gains is, therefore, false.
This understanding aligns with financial principles that distinguish between different categories of income and deductions for tax purposes. Tax regulations are complex, and specific circumstances may vary, so it's always advisable to consult a tax professional for personalized advice.