Income Taxes

What is earned income made up of?

• Investments

• Wages and salaries

• Gifts

• Interest from savings

How is money earned on an hourly basis classified?

• Salary

• Wage

• Bonus

• Commission

What is passive income?

• Income that is earned from a full-time job

• Income that is earned with very little effort on your part

• Income that is only earned from investments in stocks

• Income that is earned from performing daily tasks

Which of the following is an example of passive income?

• Working as a software developer

• Being a landlord and earning rent income

• Earning a salary from a 9-to-5 job

• Performing freelance work

Which of the following is NOT a passive income idea?

• Invest in long-term stocks

• Crowdfund real estate

• Work as a full-time teacher

• Own rental properties

What is Capital Gains Tax?

• Tax on the total value of an inherited estate

• Tax you owe when you sell something for a profit

• Tax on your total annual income

• Tax on the purchase of capital assets

Capital Gains Tax can apply to which of the following?

• Only stocks

• Only real estate

• Stocks, bonds, and real estate

• Only bonds

What determines the tax rate for Capital Gains Tax?

• The price at which the asset was sold

• The original cost of the asset

• How long you owned the asset

• The current market value of the asset

Which statement is true regarding the tax rate for short-term and long-term capital gains?

• Short-term gains are taxed at a lower rate than long-term gains

• Long-term gains are not taxed

• Short-term gains are taxed at a higher rate than long-term gains

• Both short-term and long-term gains are taxed at the same rate

Portfolio income includes all of the following EXCEPT:

• Dividends

• Sold Stocks

• Interest earned

• Salary from employment