ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Since investments are considered unearned income, taxes do not have to be paid on earnings.
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Taxes are often owed on profits generated from investments.
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Taxes only have to be paid on employer-sponsored investment accounts.
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Taxes are always paid on investments either when the money is placed in the investment or removed from the investment.
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Detailed explanation-1: -You typically only have to pay taxes on the sale of investments when you receive a gain. To figure this out, you have to subtract the cost basis of your investment, which is normally what you paid, from the sale price to see if you had a gain or a loss.
Detailed explanation-2: -The best answer is D. Since this mutual fund invests solely in municipal securities, there is no Federal tax liability on the interest income received (remember, the interest income from municipal securities is exempt from Federal income tax).
Detailed explanation-3: -Expert-Verified Answer. Answer : personal investments should be made cautiously.
Detailed explanation-4: -On the income statements of publicly traded companies, an item called investment income or losses is commonly listed. This is where the company reports the portion of its net income obtained through investments made with surplus cash instead of being earned in its usual line of business.