All Courses > Funds > 100
Funds 104: Taxes on Mutual Fund Income

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
When is the worst time to buy a fund, from a tax standpoint?
Choose wisely. There is only one correct answer.
Right before a fund makes a distribution. If you buy a fund just before it makes a distribution, you'll pay taxes on that distribution, even though you haven't enjoyed any of the appreciation that led to that distribution.
2.
Income from municipal bond mutual funds may be taxable on the state level.
Choose wisely. There is only one correct answer.
True. In some cases, they are taxable on the state level.
3.
The _______ is what you earn when you sell mutual fund shares at a profit.
Choose wisely. There is only one correct answer.
Capital gain. The other two are earned when the fund, not you, makes a profit.
4.
Which IRS form shows ordinary dividends?
Choose wisely. There is only one correct answer.
1099-DIV. Form 1099-DIV reports dividends.
5.
When you exchange mutual fund shares from one fund to another in a fund family, it is a tax-free exchange.
Choose wisely. There is only one correct answer.
False. An exchange is considered a sale and purchase for tax purposes, except in qualified retirement plans.