Which of the Following Is True About Mutual Funds and Taxes

question 26

Multiple Choice

Which of the following is true about mutual funds and taxes?

• A) Capital gain distributions are taxed when you sell your shares.
• B) Income dividends are taxed quarterly.
• C) Investment companies are required to send each shareholder a year-end statement that specifies how much each received in dividends and capital gain distributions.
• D) Capital gains distributions are not taxed.
• E) Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account.

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Definitions:

Gross Profitability

A financial metric indicating the revenue left after deducting the cost of goods sold, relative to sales.

Net Sales

The total revenue generated from goods and services, minus returns, allowances, and discounts.

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A professional association dedicated to the field of training and development, focusing on workplace learning and performance.