Basics Intermediate: Reporting Investment Income on Your Federal Tax Returns

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1.

If you earned income from dividends last year, you will need to fill out IRS Form 1099-R to report them.

Choose wisely. There is only one correct answer.

True

False

False. If you earned income from dividends last year, you will get Form 1099-DIV in the mail.

2.

The basic tax form for filing individual income taxes is the 1040.

Choose wisely. There is only one correct answer.

True

False

True. The basic tax form for filing individual income taxes is the 1040.

3.

If you experienced capital gains or losses, you should use Schedule D to report them at tax time.

Choose wisely. There is only one correct answer.

True

False

True. IRS Schedule D is used for this purpose.

4.

To determine which of your investment income is taxable, you would consult _______.

Choose wisely. There is only one correct answer.

Publication 525

Publication 550

Publication 590

Publication 550. Publication 550 describes income that is and is not subject to taxation.

5.

The amount of taxable gain or loss on an asset is the difference between the amount you sell it for and its basis.

Choose wisely. There is only one correct answer.

True

False

True. The amount of taxable gain or loss on an asset is the difference between the amount you sell it for and its basis.

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