Under current tax law, in order for the profits from the sale of any investment to be considered long -term capital gain income, the investment must have been held for:
Answer(s): B
Under current tax law, in order for the profits from the sale of any investment to be considered long-term capital gain income, the investment must have been held for longer than 12 months.
Sarah Slick is kicking herself for having bought the stock of Bounce, Inc.at a higher price than she needed to have paid. She bought it at $50 a share on November 20th and watched its price drop during December.Ms. Slick is confident that Bounce's stock price will bounce back (pun intended), but she decides that in the meantime, she will sell her shares and use the realized capital loss to offset some of the capital gains she has realized on other investments during the year. Thus, on December 30th, she sells her shares of Bounce for $40 a share. During the first couple weeks of the new year, Sarah observes Bounce's price creeping upward, and she buys the same number of shares she previously sold for $45 a share on January 18th.Given this scenario, which of the following statements is true?
Answer(s): C
If Sarah repurchases Bounce Stock on January 18th for $45 a share after selling it on December 30th for $40 a share, she did not wait the requisite 30 days after her sale of Bounce shares to repurchase them and cannot deduct her realized capital loss of $10 a share when calculating her taxes for that tax year. It doesn't matter that the repurchase occurred in the next tax year or that she waited the requisite number of days after she purchased the shares before selling them. This is not an example of an illegal "wash sale," so the SEC won't be filing any charges against Sarah.
Which of the following is not a feature associated with an investment in preferred stock?
Choice C describes a feature that is not associated with an investment in preferred stock. Preferred shareholders usually have no voting rights whatsoever. Preferred stock usually pays a fixed dividend and is usually cumulative, which means that missed dividends must be made up before common shareholders can receive any dividends. Preferred stock sometimes has a convertible feature, which allows the preferred stockholders to convert their shares to common stock.
ion No: 308Ms. Newbie, a newly-minted registered representative with Savvy Investments, just had her first client walk through the door. The new account form that the client receives a copy of must contain the signatures of:I). the client.II). Ms. Newbie.III). Ms. Newbie's branch manager/supervisor.
The new account form that Ms. Newbie's client will receive must contain the signatures of both Ms. Newbie and her branch manager/supervisor. The signature of the client is not a requirement.
Tex Payor bought shares of the Stocks4U Mutual Fund on February 26th. During the year, the fund sold some of the stocks in which it was invested, generating long-term capital gain income for the fund. Tex received a distribution of some of these gains at the end of the year, based on his proportio nate ownership of the fund.Which of the following statements is true regarding the tax consequences of this distribution to Tex?
When Tex receives distributions of long-term capital gain income earned by a fund that he bought on February 26th, he will have to pay tax on the distribution at the tax rate for long - term capital gains, which are currently taxed preferentially. The amount of time the fund held the securities prior to selling them determines whether the capital gain distribution will be considered long -term or short-term, not the amount of time the investor has owned shares of the fund. All distributions-both dividends and capital gains-are taxable at the shareholder level, not at the fund level.
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