What is the benefit of understanding capital gains exemptions? Option: Higher tax liability, Guaranteed investment returns, Increased investment risk, Reduced tax burden

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What is the benefit of understanding capital gains exemptions?

Higher tax liability

Guaranteed investment returns

Increased investment risk

Reduced tax burden

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Why is tax saving considered an important aspect of financial planning?

"It helps you reduce your tax liability and increase your overall savings."

"It eliminates the need for budgeting or tracking expenses, simplifying finances."

"It allows you to avoid paying taxes altogether, maximizing your income."

"It guarantees you'll receive a tax refund every year, boosting your finances."

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Why is the grandfathering clause important for investors?

"It simplifies the tax code for all investors"

"It protects against sudden changes in investment taxation"

"It eliminates all risks associated with long-term investments"

"It guarantees higher returns on all investments"

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What is the purpose of tax planning?

"To evade paying taxes"

"To maximize tax liability"

"To donate all income to charity"

"To fully utilize government benefits and comply with regulations"

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What is a primary advantage of utilizing a 401(k) plan for retirement savings?

Ability to withdraw funds without penalties at any time

No restrictions on the amount that can be contributed annually

Investment growth is not subject to immediate taxation

Assurance of positive investment returns over time

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Which plan is generally considered more tax-efficient in the context of Long Term Capital Gains (LTCG)?

SWP, as a portion of LTCG is tax-exempt.

Both plans have the same tax implications for LTCG.

Tax efficiency depends on individual investment choices, not the plan type.

Dividend Plan, as dividends are taxed at a lower rate.