Series 65: Unit 15 Quiz 2

If an employed client has $12,000 of capital gains and $15,000 of capital losses in the most recent taxable year, how much unused loss, if any, is carried forward by the client to the following tax year? A. $3,000 B. $0 C. $12,000 D. $15,000

$0

An investor purchased 100 shares of a stock at $100 per share on January 1. On the following July 1, the shares were sold for $120 per share. The tax consequences are A. a $2,000 long-term gain. B. a $2,000 short-term gain. C. a $2,000 short-term loss. D. a $2,000 long-term loss.

A $2,000 short-term gain

For tax purposes, the sale of an investment at a profit will result in A. ordinary income. B. alternative minimum tax liability. C. a capital gain. D. passive income.

A capital gain

An investment adviser representative specializes in the senior market. A number of his clients have reached the age where they are contemplating selling their homes and moving into an assisted living facility. The profit made on the sale of their homes will be used to defray the costs of their new residence. Under current tax laws, which of the following are true? 1. A single person pays no tax on the first $250,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years. 2. A single person pays no tax on the first $500,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years. 3. A married couple pays no tax on the first $250,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years. 4. A married couple pays no tax on the first $500,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years

A single person pays no tax on the first $250,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years and a married couple pays no tax on the first $500,000 of net profit realized on the sale of a primary residence that has been occupied for at least two of the past five years

A married couple has lived in the same home for 40 years and now, with the children all gone, they've decided to sell and move to a retirement village. They purchased the home for $80,000 and have accepted a contract for $800,000. The tax consequence of this sale is A. a $0 capital gain. B. a $470,000 capital gain. C. a $720,000 capital gain. D. a $220,000 capital gain.

A $220k capital gain

Taxation is an important part of investment planning. In general, it is correct to state that a taxpayer's effective tax rate A. is based on a different tax table than the marginal tax rate. B. is lower than the marginal tax rate. C. is more important than the marginal tax rate when considering tax-deductible contributions. D. and the marginal tax rate are the same.

Is lower than the marginal tax rate

Your client purchased 1,000 shares of ABC common stock on February 28, 2021. When did that purchase qualify for long-term capital gain or loss treatment? A. February 28, 2022 B. February 29, 2022 C. March 1, 2022 D. March 1, 2021

March 1, 2022

A loss derived from a limited partnership may be offset against income from A. other limited partnerships. B. bonuses received in addition to a regular salary. C. dividends received from common stocks. D. capital gains from municipal bonds.

Other limited partnerships

Last year, an investor had a $5,000 loss after netting all realized capital gains and losses. This year, the investor has a $1,000 capital gain. After netting his gains and losses, what will be his tax situation this year? A. He will offset $1,000 ordinary income this year. B. There will be no tax consequences. C. He will have a $1,000 gain. D. He will have a $1,000 loss to carry over to the next year.

He will offset $1,000 ordinary income this year

You have a client who was divorced three years ago, maintains a home, and has custody of the children. More than likely, the most advantageous tax filing status for your client is A. single. B. head of household. C. divorced parent. D. joint.

Head of household

An investor would have to pay the alternative minimum tax when A. the investor has received income from a limited partnership. B. the investor's capital gains exceed 10% of total income. C. it exceeds the investor's regular income tax. D. there are tax-preference items reported on the tax return.

It exceeds the investor's regular income tax

An investor purchases 1,000 shares of ABC at $42 per share. One year later, the stock is trading at $50 per share and the investor receives 50 shares of ABC as a stock dividend. How will this dividend be currently taxed? A. As $2,500 ordinary income B. As a $2,500 capital gain C. As a $2,100 capital gain D. The shares are not subject to taxation

The shares aren't subject to taxation