Choose wisely. There is only one correct answer to each question.
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1.
What is your basis composed of?
Both of the above. Your basis is the combination of cash paid plus any dividends reinvested that have already been taxed.
2.
In which situation might you consider waiting to sell an investment?
A big capital gains tax would hit you hard right now. Consider waiting until you can make up that hit with other tax savings.
3.
What is the purpose of tax-loss selling?
To minimize the amount of tax that you pay on an investment that you have sold for a profit. Tax-loss selling is a tax-management strategy.
4.
What is tax-loss selling?
Selling investments that you've lost money in to offset the gains you're taking on winning investments. Tax-loss selling is a way for investors to manage the amount of taxes that they pay on their investments today.
5.
Your basis in an investment is how much you paid for it.
False. You may need to include reinvested dividends that have already been taxed.
