Chapter 7 Flashcards
1
Q
Generally, interest income is taxed at ordinary rates and dividend income is taxed at capital gains rates.
A
TRUE
2
Q
Qualified dividends received by individuals are taxed at either a 0 percent, a 15 percent, or a 20 percent preferential rate.
A
TRUE
3
Q
Losses associated with personal-use assets, sales to related parties, and wash sales are NOT currently deductible.
A
TRUE
4
Q
Capital loss carryovers for individuals are NOT carried forward indefinitely.
A
FALSE
5
Q
When selling stocks, which method of calculating basis provides the greatest opportunity for minimizing gains or increasing losses?
A
Specific Identification
6
Q
What is the Tax Basis?
A
the cost of the stock + any additional brokerage fees paid by the taxpayer to acquire the stock
