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Funds 104: Taxes on Mutual Fund Income

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1.
Which would you rather own in a taxable account?
Choose wisely. There is only one correct answer.
It depends on which is the better aftertax performer. If you're investing in a taxable account, it's wise to consider taxes when investing. However, don't let the tax tail wag the investment dog. What's most important is how much you keep after taxes, not how much Uncle Sam gets.
2.
Which IRS form reports withdrawals from retirement plans?
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1099-R. This form reports retirement plan withdrawals.
3.
The _______ is what you earn when you sell mutual fund shares at a profit.
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Capital gain. The other two are earned when the fund, not you, makes a profit.
4.
You may be taxed on a transfer between mutual funds because the IRS sees the transfer as a dividend.
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False. You will be taxed on it because the IRS sees it as a capital gain, if one has been made.
5.
Which of the following are not taxed?
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Capital losses. They are not income.