ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Stock
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Bond
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Tax-obligated
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Tax-deferred
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Detailed explanation-1: -What is a tax-deferred investment? With a tax-deferred investment, you pay federal income taxes when you withdraw money from your investment, instead of paying taxes up front. Any earnings your contributions produce while invested are also tax deferred.
Detailed explanation-2: -One of the most popular types of tax-deferred account is a retirement account, including 401(k) plans, 403(b) plans, 457(b) plans, and IRAs. Other types of tax-deferred accounts include tax-deferred annuities, permanent life insurance, and health savings accounts.
Detailed explanation-3: -In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. Net investment income generally does not include wages, unemployment compensation, Social Security Benefits, alimony, and most self-employment income.
Detailed explanation-4: -Investment Income: “Investment income” includes interest, rents, royalties, dividends, capital gains, and other income derived from an asset.