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1.
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.
2.
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.
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.
What is the tax attraction of variable annuities?
Contributions grow tax-deferred until retirement. Gains are then taxed as income upon withdrawal.
5.
When selling stock, you can sometimes reduce your capital gains if you sell only certain shares and not others.
True. If the shares were bought at different prices, you can specify that shares bought at higher prices be sold, which can then lower your capital gains.
