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Quiz: Do You Know These Investment Tax Facts?

By John Manganaro

Slideshow November 29, 2022 at 09:32 AM Share & Print

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Research shows that tax-efficient financial planning can deliver up to several years of additional portfolio longevity for wealth management clients while improving estate plan efficiency and driving client loyalty.

No surprise, then, that wealth management professionals say tax-efficient investment and income planning are in high demand, especially among the mass affluent and high-net-worth populations. What is less clear is the level of tax expertise advisors bring to the table, as many have traditionally focused on investing and accumulation.

Explore the slideshow to find ThinkAdvisor’s latest Tax Facts Quiz, focused on essential investment tax concepts. Only the tax-savviest can ace the test, but all advisors can benefit from the refresher.

Want more tax-focused insights? Find current and accurate answers to your tax questions with Tax Facts.

More quizzes on ThinkAdvisor:

John Manganaro

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Which of the following IRS Forms are used to report information about capital gains and losses?

a. Form 1040.

What are the three types of capital losses?

a. Realized losses, unrealized losses and recognizable losses.

When a taxpayer acquires property as a gift, the general rule is that the donee taxpayer takes the donor’s basis in the property.

True

Which of the following changes was made as part of the American Taxpayer Relief Act of 2012?

c. The American Taxpayer Relief Act of 2012 extended the 0% and 15% capital gains rates for most taxpayers and increased the rates for taxpayers in the highest income tax bracket to 20%.

How did the Tax Cuts and Jobs Act of 2017 affect the specific tax rates that apply to long-term capital gains and qualified dividend income?

a. The 2017 tax reform law retained the current tax rates that apply to long-term capital gains and qualified dividend income.

The amount of capital losses a married taxpayer may deduct in a tax year is limited to $,6000.

False

Short-term capital gains enjoy the same preferential capital gains rates as long-term gains.

False

If a taxpayer acquires property from a deceased person by inheritance or bequest, how is their basis in the property determined?

c. The basis is determined to be the property’s fair market value as of the date of the original owner’s death.

How is a loss realized on a sale between related persons treated for tax purposes?

a. Such a loss is disallowed and may not be used to offset capital gains for income tax purposes.

Which of the following types of property are generally not considered to be capital assets?

b. Supplies of a type regularly used or consumed by the taxpayer in the ordinary course of the taxpayer’s trade or business.

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Quiz: Do You Know These Investment Tax Facts?

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Which of the following IRS Forms are used to report information about capital gains and losses?

a. Form 1040.

What are the three types of capital losses?

a. Realized losses, unrealized losses and recognizable losses.

When a taxpayer acquires property as a gift, the general rule is that the donee taxpayer takes the donor’s basis in the property.

True

Which of the following changes was made as part of the American Taxpayer Relief Act of 2012?

c. The American Taxpayer Relief Act of 2012 extended the 0% and 15% capital gains rates for most taxpayers and increased the rates for taxpayers in the highest income tax bracket to 20%.

How did the Tax Cuts and Jobs Act of 2017 affect the specific tax rates that apply to long-term capital gains and qualified dividend income?

a. The 2017 tax reform law retained the current tax rates that apply to long-term capital gains and qualified dividend income.

The amount of capital losses a married taxpayer may deduct in a tax year is limited to $,6000.

False

Short-term capital gains enjoy the same preferential capital gains rates as long-term gains.

False

If a taxpayer acquires property from a deceased person by inheritance or bequest, how is their basis in the property determined?

c. The basis is determined to be the property’s fair market value as of the date of the original owner’s death.

How is a loss realized on a sale between related persons treated for tax purposes?

a. Such a loss is disallowed and may not be used to offset capital gains for income tax purposes.

Which of the following types of property are generally not considered to be capital assets?

b. Supplies of a type regularly used or consumed by the taxpayer in the ordinary course of the taxpayer’s trade or business.

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