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1.
Income from municipal bond mutual funds may be taxable on the state level.
True. In some cases, they are taxable on the state level.
2.
Which of the following in a mutual fund is not taxable?
A mutual fund share. Only income is taxable.
3.
When you exchange mutual fund shares from one fund to another in a fund family, it is a tax-free exchange.
False. An exchange is considered a sale and purchase for tax purposes, except in qualified retirement plans.
4.
Buying a mutual fund that has a very low turnover rate will reduce the number of _______.
Capital gains. A lot of turnover will likely result in a lot of capital gains, which are normally taxable. If you want to reduce taxes, consider low-turnover funds.
5.
Which IRS tax form shows the proceeds of mutual fund share sales?