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1.
What does "stepped-up basis" mean?
An investment's basis changes to that of the market value on the day of your death. Stepped-up basis is most commonly known in estate planning, where if you die, the basis will step up to that of the day of your death. Whoever inherits the stock will thus enjoy less tax on it.
2.
When does your five-taxable-year period for Roth IRAs start?
On Jan. 1 of the tax year when you make your first contribution or conversion to a Roth IRA.
3.
You must generally begin making mandatory withdrawals from 401(k) and traditional IRA accounts when you reach what age?
73. You must generally begin making mandatory withdrawals from 401(k) and traditional IRA accounts when you reach 73.
4.
If you buy a stock for $20 and sell it for $30, the $10 gain is a form of ordinary income.
False. The $10 gain is a capital gain, and may be taxed differently from ordinary income; it depends on how long you held the stock.
5.
If you have a capital loss of $4,000 in one year and you deduct the limit of $3,000 on your income tax return, what happens to the leftover $1,000?
You carry it over to the next year. The IRS lets you carry over any undeducted loss into subsequent years.
