Which of the Following Is True About Mutual Funds and Taxes

question 63

Multiple Choice

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

• A) Capital gain distributions are taxed as short-term capital gains.
• 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 income dividends and capital gain distributions.
• D) Capital gains distributions are not reported on your federal tax return.
• E) Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account.

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