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Investing Basics Beginner: Capital Gains

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1.
You have a capital loss on an investment if your amount realized is less than your basis.
Choose wisely. There is only one correct answer.
True. The amount realized is what you earn from a sale, and the basis is what you paid for it.
2.
Almost _______ of all realized capital gains are received from corporate stock sales.
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50 percent. Almost half of all capital gains taxes are taxes on corporate stocks.
3.
Unrealized gains or losses on your investments must be reported on your tax returns.
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False. Only realized gains or losses must be reported on your tax returns.
4.
The capital gains tax is a tax on _______.
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The increase in value of an investment. This increase is taxed in the year that you realize the gains.
5.
Long-term capital gains are taxed at a higher rate than short-term capital gains.
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False. Long-term gains are taxed at a lower rate than short-term gains.