Capital Gains & Investments - Tax Quiz

Question 1 of 25

For most assets, how long must you hold the asset before a sale qualifies for long-term capital gain treatment?

More than one year Exactly six months More than five years At least 30 days

Question 2 of 25

How is a net short-term capital gain generally taxed?

At a flat 15% rate At your ordinary income tax rates At a flat 0% rate It is always tax-free

Question 3 of 25

What are the three possible long-term capital gains tax rates that apply depending on taxable income?

0%, 15%, or 20% 5%, 10%, or 15% 10%, 24%, or 37% 12%, 22%, or 32%

Question 4 of 25

For most individual taxpayers in 2025, the tax rate on most net capital gain is no higher than what percentage?

15% 20% 28% 37%

Question 5 of 25

When your capital losses exceed your capital gains, what is the maximum net loss you can deduct against ordinary income in a single year (other than married filing separately)?

$1,500 $3,000 $5,000 There is no limit

Question 6 of 25

What is the annual net capital loss deduction limit against ordinary income for a married taxpayer filing separately?

$3,000 $1,500 $750 $6,000

Question 7 of 25

What happens to a net capital loss that exceeds the annual deduction limit?

It is permanently lost It can be carried forward to later years It must be deducted as a business expense It converts to a tax credit

Question 8 of 25

A wash sale occurs when you sell stock at a loss and buy substantially identical stock within what window around the sale?

30 days before or after the sale 60 days after the sale only 7 days before the sale only 90 days before or after the sale

Question 9 of 25

What happens to the loss on a sale that is disallowed under the wash sale rule?

It is permanently disallowed It is added to the basis of the newly acquired stock It becomes an ordinary deduction It is refunded as a credit

Question 10 of 25

Up to how much gain on the sale of a main home can a single filer generally exclude from income?

$100,000 $250,000 $500,000 $50,000

Question 11 of 25

What is the maximum home-sale gain exclusion for a married couple filing jointly who qualify?

$250,000 $500,000 $1,000,000 $375,000

Question 12 of 25

To claim the main-home sale exclusion, you must generally have owned and used the home as your main residence for at least how long during the 5 years before the sale?

2 years 6 months 4 years 5 years

Question 13 of 25

Can you deduct a loss from the sale of your main home?

Yes, up to $3,000 per year No, a loss on the sale of a main home is not deductible Yes, the full amount is always deductible Only if you itemize deductions

Question 14 of 25

How are qualified dividends generally taxed?

At ordinary income tax rates At the lower long-term capital gains rates At a flat 28% rate They are always tax-free

Question 15 of 25

How are ordinary (nonqualified) dividends taxed?

At the 0%/15%/20% capital gains rates As ordinary income At a flat 10% rate They are exempt from tax

Question 16 of 25

On which form do you generally report the details of individual sales and dispositions of capital assets such as stocks?

Form 8949 Form 1099-DIV Form W-2 Form 1098

Question 17 of 25

After listing transactions on Form 8949, where are the subtotals carried to figure your overall gain or loss?

Schedule D Schedule A Schedule C Schedule SE

Question 18 of 25

On Form 8949 and Schedule D, where are short-term transactions reported relative to long-term transactions?

Short-term in Part I and long-term in Part II Both in a single combined part Long-term in Part I and short-term in Part II Short-term on Schedule A only

Question 19 of 25

What is the basis of property you buy, generally speaking?

Its cost Its current resale value Always zero The seller's original purchase price

Question 20 of 25

When you buy stock, what is generally included in your cost basis besides the purchase price?

Future expected dividends Commissions and transfer fees paid to buy it Your annual income tax The stock's market high for the year

Question 21 of 25

What is the general basis of property you inherit from a decedent?

The decedent's original purchase price The fair market value at the date of death Always zero The property's value when you eventually sell it

Question 22 of 25

If a taxpayer has a net capital gain, how does its tax rate generally compare to the rate on ordinary income?

A lower rate may apply to the net capital gain It is always taxed at a higher rate It is taxed at exactly the same rate Net capital gain is never taxable

Question 23 of 25

To determine your holding period for an asset, when do you begin counting?

The day after you acquired the asset The exact day you acquired the asset The first day of the tax year The day you first considered buying it

Question 24 of 25

Does the wash sale rule apply if you sell stock at a loss and buy substantially identical stock for your IRA within the wash sale window?

No, IRA purchases are always exempt Yes, buying substantially identical stock for your IRA can trigger the wash sale rule Only if the IRA is a Roth IRA Only for purchases over $10,000

Question 25 of 25

Which IRS schedule is used to report an overall capital gain or loss, including a capital loss carryover from a prior year?

Schedule D Schedule B Schedule E Schedule F