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Funds 104: Taxes on Mutual Fund Income

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1.
Buying a mutual fund that has a very low turnover rate will reduce the number of _______.
Choose wisely. There is only one correct answer.
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.
2.
Which of the following in a mutual fund is not taxable?
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A mutual fund share. Only income is taxable.
3.
Which IRS form reports withdrawals from retirement plans?
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1099-R. This form reports retirement plan withdrawals.
4.
Which of the following are not taxed?
Choose wisely. There is only one correct answer.
Capital losses. They are not income.
5.
You may be taxed on a transfer between mutual funds because the IRS sees the transfer as a dividend.
Choose wisely. There is only one correct answer.
False. You will be taxed on it because the IRS sees it as a capital gain, if one has been made.