Chapter 15

Making Sure the IRS Gets Its Share

IN THIS CHAPTER

Bullet Outlining the breakdown of taxes and income

Bullet Seeing how the IRS taxes securities

Bullet Comparing the different types of retirement plans

Yes, it’s true what they say: The only sure things in life are death and taxes. Although taxes are an annoying necessity, investors do get tax breaks if they invest in securities for a long period of time, and you need a good understanding of the tax discounts investors receive. Additionally, the SIE exam tests your ability to recognize the different types of retirement plans, the specifics about each one, and the tax advantages.

In this chapter, I cover tax categories and rules, from distinguishing between types of taxes to calculating capital gains for securities received as gifts. And although enjoying retirement isn’t quite as certain as pushing up daisies, I explain Uncle Sam’s claim on the cash investors put into IRAs, Keoghs, and other retirement plans. As always, you can also count on some example questions and suggestions for further review.

Everything in Its Place: Checking Out Tax and Income Categories

The many lines you see on tax forms clue you in to the fact that the IRS likes ...

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