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1.
Exchange-traded funds _______ pass capital gains taxes to their shareholders.
Do not. ETFs only generate taxes by owning dividend-paying stocks or by changing their holdings to reflect changes in their indexes.
2.
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.
3.
What is the tax attraction of variable annuities?
Contributions grow tax-deferred until retirement. Gains are then taxed as income upon withdrawal.
4.
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.
5.
Imagine you're a tax-sensitive investor. Which is the better bond for you?
It depends on your tax bracket. Investors in high tax brackets may benefit more from a muni--even if it has a lower yield--due to the tax break.
