Logo
Pattern

Discover published sets by community

Explore tens of thousands of sets crafted by our community.

Taxation of Investments

20

Flashcards

0/20

Still learning
StarStarStarStar

Dividends

StarStarStarStar

Qualified dividends are taxed at lower capital gains rates, while non-qualified dividends are taxed as ordinary income.

StarStarStarStar

Interest Income

StarStarStarStar

Interest income is usually taxed as ordinary income, but some types such as from municipal bonds may be exempt from federal taxes.

StarStarStarStar

Capital Gains

StarStarStarStar

Long-term capital gains are taxed at reduced rates, while short-term gains are taxed as ordinary income.

StarStarStarStar

Real Estate Rental Income

StarStarStarStar

Rental income is taxed as ordinary income, but expenses and depreciation can offset the income and reduce taxable income.

StarStarStarStar

Annuity Income

StarStarStarStar

Portion of annuity income may be non-taxable return of principal; the rest is taxed as ordinary income.

StarStarStarStar

Roth IRA Withdrawals

StarStarStarStar

Qualified distributions from a Roth IRA are tax-free, but non-qualified withdrawals may be subject to taxes and penalties.

StarStarStarStar

Traditional IRA Withdrawals

StarStarStarStar

Distributions are generally taxable as ordinary income. Early withdrawals may incur penalties.

StarStarStarStar

Stock Options

StarStarStarStar

Tax treatment varies between Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs).

StarStarStarStar

ETF and Mutual Fund Distributions

StarStarStarStar

Distributions are generally taxed as capital gains or dividends, depending on the underlying assets' income.

StarStarStarStar

Bond Interest (Treasury Bonds)

StarStarStarStar

Interest from U.S. Treasury bonds is taxable at the federal level but exempt from state and local taxes.

StarStarStarStar

Foreign Investments Income

StarStarStarStar

Income from foreign investments may be subject to foreign taxes, tax treaties, and U.S. taxation, potentially eligible for foreign tax credits or deductions.

StarStarStarStar

Master Limited Partnerships (MLP) Income

StarStarStarStar

MLP income can be tax-deferred as return of capital reduces cost basis; profits on sale are taxed as capital gains.

StarStarStarStar

Preferred Stock Dividends

StarStarStarStar

Preferred stock dividends can be qualified or non-qualified and are taxed accordingly, with special consideration for financial institution dividends.

StarStarStarStar

Life Insurance Policy Loans

StarStarStarStar

Policy loans are not taxable as long as the policy is in force, but proceeds above the cost basis at policy surrender or lapse are taxable.

StarStarStarStar

Savings Bond Interest

StarStarStarStar

Interest from Series EE and I Savings Bonds is tax-deferred until redemption or final maturity and may be tax-free if used for education.

StarStarStarStar

Real Estate Investment Trusts (REIT) Dividends

StarStarStarStar

REIT dividends are often taxed as ordinary income, but a portion may be treated as capital gains or return of capital.

StarStarStarStar

Peer-to-Peer Lending Interest

StarStarStarStar

Interest earned from peer-to-peer lending platforms is taxable as ordinary income.

StarStarStarStar

Precious Metals

StarStarStarStar

Capital gains on precious metals are taxed as 'collectibles' at a 28% maximum rate, higher than the long-term capital gains rate for other assets.

StarStarStarStar

Royalty Income

StarStarStarStar

Royalty income is generally taxed as ordinary income, and expenses related to the production of that income may be deductible.

StarStarStarStar

Commodity Futures

StarStarStarStar

Commodity futures are subject to special tax rules, with 60% taxed as long-term capital gains and 40% as short-term, regardless of holding period.

Know
0
Still learning
Click to flip
Know
0
Logo

© Hypatia.Tech. 2024 All rights reserved.