ITX - 43B

Question 1

Taxed as/rate: Life insurance dividends

Answer 1

Not taxable

Question 2

Taxed as/rate: Qualified dividends

Answer 2

10% & 15% = 0%
25%, 28%, 32%, 35% = 15%
39.6% = 20%

Question 3

Taxed as/rate: Money market mutual fund dividends

Answer 3

Ordinary income

Question 4

Taxed as/rate: S-corp dividends

Answer 4

Ordinary income

Question 5

Taxed as/rate: REIT dividends

Answer 5

Ordinary income

Question 6

Taxed as/rate: MF distributions of STCGs and interest

Answer 6

Ordinary income

Question 7

Taxed as/rate: Preferred stock dividends (most)

Answer 7

Ordinary income

Question 8

Taxed as/rate: Capital gains - LT (other than collectibles and unrecaptured real estate depreciation)

Answer 8

10% & 15% = 0%
25%, 28%, 32%, 35% = 15%
39.6% = 20%

Question 9

Taxed as/rate: Capital gains - ST

Answer 9

Ordinary income

Question 10

Taxed as/rate: Installment sale (seller)

Answer 10

Each payment is part capital gain, part return of basis, and part interest (ordinary income)

Question 11

Taxed as/rate: Private annuities

Answer 11

Each payment is part capital gain, part return of basis, and part interest (ordinary income)

Question 12

Taxed as/rate: Commercial annuities - withdrawals

Answer 12

Ordinary income on earnings, plus 10% penalty if under age 59 1/2

Question 13

Taxed as/rate: Commercial annuities - annuitized payments

Answer 13

Part return of basis and part ordinary income

Question 14

Taxed as/rate: Life insurance withdrawals (non-MEC)

Answer 14

Ordinary income once basis has been exceeded

Question 15

Taxed as/rate: Life insurance loans (non-MEC)

Answer 15

Not taxable

Question 16

Taxed as/rate: Life insurance withdrawals & loans (MEC)

Answer 16

Ordinary income on earnings, plus 10% penalty if under age 59 1/2

Question 17

Taxed as/rate: DI insurance benefits (group)

Answer 17

Ordinary income if premiums were pre-tax

Question 18

Taxed as/rate: US government bond interest

Answer 18

Ordinary income

Question 19

Taxed as/rate: TIPS

Answer 19

Ordinary income on both the interest and the increase in principal each year

Question 20

Taxed as/rate: GNMA, FNMA, FHLMC interest

Answer 20

Ordinary income

Question 21

Taxed as/rate: Municipal bond interest

Answer 21

Federal tax exempt if public purpose; state and local tax exempt if resident

Question 22

Taxed as/rate: Zero coupon bond interest

Answer 22

Ordinary income on imputed interest

Question 23

Taxed as/rate: Passive losses (LP & rental)

Answer 23

Deduction limited to passive income

Question 24

Taxed as/rate: Alimony

Answer 24

Ordinary income to the receiver

Question 25

Taxed as/rate: Excess alimony

Answer 25

Recaptured as ordinary income in 3rd post-separation year

Question 26

Taxed as/rate: Social Security Income

Answer 26

Up to 85% of SS income may be taxed as ordinary income if combined (provisional) income exceeds the threshold

Question 27

Taxed as/rate: Restricted stock

Answer 27

Ordinary (W-2) income at maturity/exercise (no longer substantial risk of forfeiture on restricted stock

Question 28

Taxed as/rate: Phantom stock

Answer 28

Ordinary (W-2) income at maturity/exercise (no longer substantial risk of forfeiture on restricted stock

Question 29

Taxed as/rate: SARs

Answer 29

Ordinary (W-2) income at maturity/exercise (no longer substantial risk of forfeiture on restricted stock

Question 30

Taxed as/rate: Life Insurance Death Benefit

Answer 30

Not taxable unless transferred for value

Question 31

Taxed as/rate: ISO - At grant

Answer 31

no tax

Question 32

Taxed as/rate: ISO - At exercise

Answer 32

no tax

Question 33

Taxed as/rate: ISO - At sale if qualifying disposition

Answer 33

LTCG

Question 34

Taxed as/rate: ISO - At sale if disqualifying disposition

Answer 34

ordinary income on bargain element | rest is LT or ST capital gain based on holding period from exercise

Question 35

Taxed as/rate: NQSO - At grant

Answer 35

no tax

Question 36

Taxed as/rate: NQSO - At exercise

Answer 36

ordinary (W-2) income on bargain element (basis becomes full FMV on date of exercise)

Question 37

Taxed as/rate: NQSO - At sale

Answer 37

LT or ST capital gain based on holding period from exercise