Basics Intermediate: Reporting Investment Income on Your Federal Tax Returns

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1.
If you traded stocks last year, you will receive IRS information return _______ to report them.
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1099-B. Form 1099-B is the form used for stock transactions.
2.
Dividends reinvested to buy more securities are not taxable as ordinary income.
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False. Dividends reinvested to buy more securities are taxable as ordinary income (except in the case of tax-sheltered accounts).
3.
You can receive helpful tax information directly from the IRS by reading IRS publications.
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True. Various IRS publications provide needed information that helps you fill out your forms and discern what is and is not taxable.
4.
If you experienced capital gains or losses, you should use Schedule D to report them at tax time.
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True. IRS Schedule D is used for this purpose.
5.
If your investment company reports undistributed capital gains, you will receive IRS form 4952.
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False. If your investment company reports undistributed capital gains, you will receive form 2439.