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1.
Which of the following in a mutual fund is not taxable?
A mutual fund share. Only income is taxable.
2.
A capital loss is the return of your original investment back to you.
False. A capital loss is a loss you suffer when you sell shares for less than the price you paid for them.
3.
Which IRS form reports withdrawals from retirement plans?
1099-R. This form reports retirement plan withdrawals.
4.
Buying a mutual fund that has a very low turnover rate will reduce the number of _______.
Capital gains. A lot of turnover will likely result in a lot of capital gains, which are normally taxable. If you want to reduce taxes, consider low-turnover funds.
5.
An exchange of shares from one mutual fund to another in a fund family is a taxable event, except in the case of _______.
Qualified retirement plans. Exchanges made within qualified retirement plans are tax-exempt.
