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1.
Sales of art, antiques, gems, and stamps are exempt from capital gains taxes.
Choose wisely. There is only one correct answer.
False. Collectibles, including art, antiques, gems, and stamps, are subject to capital gains taxes.
2.
Short-term assets are assets held _______ month(s) or fewer.
Choose wisely. There is only one correct answer.
Twelve. This has implications for taxation.
3.
The amount you get for selling an asset is known as the basis.
Choose wisely. There is only one correct answer.
False. The amount you get for selling an asset is called the amount realized.
4.
Long-term capital gains are taxed at higher rates than short-term capital gains.
Choose wisely. There is only one correct answer.
False. Long-term gains are taxed at lower rates than short-term gains. This is meant to encourage investors to invest for longer periods.
5.
Unrealized gains or losses on your investments must be reported on your tax returns.
Choose wisely. There is only one correct answer.
False. Only realized gains or losses must be reported on your tax returns.