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Funds 104: Taxes on Mutual Fund Income

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1.
Capital gains distributions are taxed at your ordinary income tax rate.
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False. They are taxed at either the short-term or the long-term rate, whichever is applicable.
2.
Which would you rather own in a taxable account?
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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.
3.
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.
4.
Which IRS form shows ordinary dividends?
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1099-DIV. Form 1099-DIV reports dividends.
5.
Which of the following are not taxed?
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Capital losses. They are not income.