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.
Capital gains distributions are taxed at your ordinary income tax rate.
Choose wisely. There is only one correct answer.
False. They are taxed at either the short-term or the long-term rate, whichever is applicable.
2.
Which IRS tax form shows the proceeds of mutual fund share sales?
Choose wisely. There is only one correct answer.
1099-B. This form reports the sales of shares.
3.
A capital loss is the return of your original investment back to you.
Choose wisely. There is only one correct answer.
False. A capital loss is a loss you suffer when you sell shares for less than the price you paid for them.
4.
An exchange of shares from one mutual fund to another in a fund family is a taxable event, except in the case of _______.
Choose wisely. There is only one correct answer.
Qualified retirement plans. Exchanges made within qualified retirement plans are tax-exempt.
5.
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.