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Question $10$

Which of the following statement is false?$1.$ A common income$-$shifting strategy is to shift deductions from high tax rate taxpayers to low tax rate taxpayers$\mathrm{.}2.$ Else being equal, recognizing deductions during lower$-$tax$-$rate years than higher$-$tax$-$rate years results in more tax savings$\mathrm{.}3.$ Else being equal, if tax rates are decreasing over time, taxpayers are better$-$off by deferring the recognition of income$\mathrm{.}4.$ Else being equal, firms choosing LIFO instead of FIFO saves more taxes during the current year because LIFO inventory system recognizes expenses earlier$\mathrm{.}5.$ Investing in municipal bonds to avoid paying tax on interest earned and to earn a higher after$-$tax yield is an example of conversion strategy when it comes to tax planning.