Mrs. Stout has a $35,000 capital gain eligible for a 28% preferential tax rate. Which of the following statements is false?
A. If Mrs. Stout's regular marginal tax rate is 24%, the preferential tax rate has no value to her.
B. If Mrs. Stout's regular marginal tax rate is 35%, the preferential tax rate saves her $2,450 in tax.
C. If Mrs. Stout's regular marginal tax rate is 22%, she can elect to recharacterize the capital gain as ordinary income.
D. None of the above is false.
Answer: C
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