Tax Strategies Flashcards
7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Tax Strategies flashcards as text
Under the wash sale rule, a loss is disallowed if substantially identical securities are purchased within what window?
Answer: 30 days before or after the sale
The wash sale rule covers a 61-day window: 30 days before through 30 days after the sale.
To qualify for long-term capital gain treatment, a capital asset generally must be held for:
Answer: More than one year
Assets held more than one year produce long-term gains taxed at preferential rates.
A married couple filing jointly has a net capital loss of $10,000. How much can offset ordinary income this year?
Answer: $3,000
Net capital losses offset up to $3,000 of ordinary income per year, with the rest carried forward.
What is the rate of the Net Investment Income Tax on high-income taxpayers?
Answer: 3.8%
The NIIT is 3.8% on the lesser of net investment income or MAGI above the threshold.
To receive qualified dividend treatment on common stock, the investor must hold the shares for more than how many days during the 121-day period around the ex-dividend date?
Answer: 60 days
Common stock must be held more than 60 days in the 121-day period starting 60 days before the ex-dividend date.
Interest on most general obligation municipal bonds is:
Answer: Exempt from federal income tax
Interest on most municipal bonds is excluded from federal gross income.
An investor in the 37% federal bracket is considering a 3.0% municipal bond. What is the approximate tax-equivalent yield?
Answer: 4.76%
Tax-equivalent yield equals 3.0% / (1 - 0.37), which is about 4.76%.