What is the general anti$-$avoidance rule $($GAAR$)?$

Multiple Choice

Non$-$arm's length transactions are prohibited.

Taxpayers cannot enter into transactions where the sole purpose is to avoid, reduce or defer taxes, without any business purpose.

Avoid paying taxes at all costs.

All of taxpayer's transaction amounts must be reasonable.

If Cindy invests $$1,000$ at $8\%$ and subsequently earns $$48$ in after$-$tax income on the investment at the end of the first year, what is Cindy's tax rate?

Multiple Choice

$8\%$

$4\mathrm{.}8\%$

$40\%$

$60\%$