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Funds 104: Taxes on Mutual Fund Income

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1.
Which IRS form shows ordinary dividends?
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1099-DIV. Form 1099-DIV reports dividends.
2.
When is the worst time to buy a fund, from a tax standpoint?
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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.
3.
Income from municipal bond mutual funds may be taxable on the state level.
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True. In some cases, they are taxable on the state level.
4.
An exchange of shares from one mutual fund to another in a fund family is a taxable event, except in the case of _______.
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Qualified retirement plans. Exchanges made within qualified retirement plans are tax-exempt.
5.
Which of the following in a mutual fund is not taxable?
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A mutual fund share. Only income is taxable.