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14 Cards in this Set
- Front
- Back
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Tax treatment of LT CG
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-Must hold a security for 12 months + 1 day
-Taxed at 15% Net LT gain x 15% = Tax liability |
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Tax treatment of ST CG
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-Taxed at inv ordinary income tax rate
Net ST gain x investors tax rate = tax liability |
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Netting CG and CL
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1.Always net total gains against net total losses
2.Net losses may be written off agaisnt ordinary income up to a max of $3000 per year 3.Any amount over $3k must be carried forward to the next year |
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T or F
When the FIRST position an inv has in a sec is SHORT, the holding period will always be SHORT no matter how long the security is held |
T
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T or F
Cash dividends are generally taxed at 15% and fully taxable |
T
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Dividends and int received from foreign investments
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-Includes ADRs
- The foreign company and govt will w/hold a % of the clients dividends and income, but not whold CG - Client can use amount wheld as a tax credit or itemized deduction |
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Stock dividends
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-not treated as OI
-used to reduce an inv basi |
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Wash sale rule
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Client sells securites at a loss and win 30 before or after the sale purchases same security, the loss in not allowed in the CURRENT year
- Applies to the the purchase of calls and convertible sec of the same sec -This adjustment postpones the loss until new postion is sold |
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Corporate taxes
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-70% of dividends received by a corporation is excluded from tax
-Other 30% is taxable *REITs do NOT qualify for this exclusion |
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Regressive tax
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A tax that puts a greater tax burden on those who can least afford it
Ex;Sales tax, gas tax, flat tax |
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Progressive tax
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Tax rate icreases as the income increases
EX: Income, gift, estate taxes |
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T or F
The holding period on stock purchased by exercising a call begins on the date the call is exercised |
T
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CB of a bond
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is the original price paid and does NOT include the bonds accrued interest
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CB of common or preffered stock
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Includes the acquisition price PLUS all associated costs such as commission and fees
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