Unit 15

Question 1

Interest received from municipal bonds and municipal bond funds is generally income tax free on state or federal basis

Answer 1

Federal

Question 2

What state-specific municipal bond funds are subject to

Answer 2

Capital gains tax

Question 3

How much maximum a client can apply of losses against ordinary income for the year

Answer 3

$3,000

Question 4

How to calculate when a purchase qualifies for long-term capital gain or loss treatment?

Answer 4

Add one day and then another year

Question 5

How long must a customer who sold a bond at a loss wait before he can buy back a substantially identical bond and not have the sale classified as a wash sale?

Answer 5

30 days

Question 6

Regressive taxes

Answer 6

Those where the rate remains the same, regardless of the cost of the item subject to the tax.

Question 7

Tax status with the lowest tax burden

Answer 7

Head of household

Question 8

How much a married couple is permitted to exclude from taxes when selling a primary residence for a gain

Answer 8

$500,000

Question 9

What offers the opportunity to realize a capital gain rather than ordinary income

Answer 9

Stock dividends

Question 10

The term used to describe these items used to arrive at the taxpayer’s alternative minimum taxable income (AMTI) is

Answer 10

Tax preference items

Question 11

Tax Preference Items (4)

Answer 11

1. Deductions taken for accelerated (but not straight-line) depreciation
2. Excess intangible drilling costs
3. Capital gains on incentive stock options
4. Otherwise tax-exempt interest from specified private activity bonds