Chapter 15

Making Sure the IRS Gets Its Share


Bullet Outlining the breakdown of taxes and income

Bullet Seeing how the IRS taxes securities

Bullet Checking taxes on gifts and inheritances

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 Series 7 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. As with the other chapters, there is some overlap between what you learned for the SIE exam and what's covered on the Series 7. 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, ...

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