Choose wisely. There is only one correct answer to each question.
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1.
If you're considering selling an appreciated investment that you bought 11 months ago, why might it make sense to hold it another month before selling it?
Because the capital gains tax would be lower after the 12 months. The lower capital gains tax can be quite an advantage for you.
2.
What is the tax attraction of variable annuities?
Contributions grow tax-deferred until retirement. Gains are then taxed as income upon withdrawal.
3.
To save tax money as a stock investor, you should avoid two things. What are they?
Dividend-paying stocks and selling shares. While the former may be easy, the latter could be a challenge over time.
4.
Municipal bonds offer tax breaks; however, they often pay lower interest rates than taxable bonds. In these cases, what factor would decide whether an investor would choose a municipal bond over a taxable bond?
Her tax bracket. The higher her tax bracket, the more likely the municipal bond would actually work in her favor.
5.
A tax-managed fund can't be considered tax-managed if it contains large companies, since large companies are more likely to pay dividends than smaller ones.
False. There are plenty of large companies that qualify to be in tax-managed funds. They simply don't need to be paying dividends.
