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Municipal Bond Interest vs. Stock Dividends in Taxes

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is the tax bill for an individual who receives a $1,000 muni bond interest payment? The investor lives in the same state that issued the bond, has owned the bond for three years, and is in the 35% tax bracket.

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1. Which of the following is TRUE of qualified dividends?

2. Which of the following tax rates apply if a shareholder receives a dividend in December and has only owned the stock for six months?

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About This Quiz & Worksheet

With this helpful quiz and worksheet, you can quickly assess your knowledge of municipal bonds and stocks. There are five short questions in the quiz, which includes a question about taxes required when municipal bonds were issued by a state other than where the investor lives.

Quiz & Worksheet Goals

This quiz will confirm your knowledge of the following:

  • Municipal bond tax when the investor lives in the state where the bond is issued
  • A characteristic of qualified dividends
  • Tax rate for dividends on shares owned less than one year
  • Owning municipal bonds issued by a state you don't live in
  • When a federal tax bill is highest

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about municipal bonds and stocks
  • Interpreting information - verify that you can read information about federal tax bills and interpret it correctly
  • Information recall - access the knowledge you've gained regarding a characteristic of qualified dividends

Additional Learning

To get an even better understanding of this subject, check out the related lesson titled Municipal Bond Interest vs. Stock Dividends in Taxes. Here are some of the topics you'll find in this lesson:

  • Overview of what municipal bonds are
  • Three factors to determine the tax rate on stock dividends
  • What happens when an investor receives unqualified dividends
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