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1.
What is the tax attraction of variable annuities?
Contributions grow tax-deferred until retirement. Gains are then taxed as income upon withdrawal.
2.
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.
3.
Which is a benefit of capital losses?
They can cancel out capital gains, and to the extent that losses exceed gains, you can deduct a net loss of up to $3,000 from your taxable income.
4.
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.
5.
Municipal bonds are popular with investors because they are free of ______ tax.
Federal and sometimes state. Muni bonds are free of federal and sometimes state taxes. This can sometimes make them more attractive than bonds that pay higher interest rates. It depends on your tax bracket.
