Reading 17: Excerpts from Invest....ivate Investors－LOS f Investment, wealth, assets, including

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CFA Institute Area 3-5, 7, 12, 14-18: Portfolio Management
Session 4: Private Wealth Management
Reading 17: Excerpts from Investment Management for Taxable Private Investors
LOS f: Explain the various types of taxation faced by investors, including taxes on earnings, assets, wealth transfers, and purchases.

tycoon

Which of the following is NOT one of the four principal targets for taxation?

A) Income received.

B) Assets sold.

C) Expenses recognized.

D) Expenditures.

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Answer and Explanation

Expenses recognized is not one of the principal targets. The principal targets are income received, assets transferred, assets owned, and expenditures.

tycoon

Estate taxes are an example of a tax on:

A) income received.

B) assets transferred.

C) assets gifted.

D) assets owned.

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Answer and Explanation

Estate taxes are a tax based upon the amount of assets owned by the decedent.

tycoon

Of the four principal targets of taxation, which is ordinarily least relevant to the investment professional?

A) Expenditures.

B) Income received.

C) Assets transferred.

D) Assets owned.

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Answer and Explanation

Of the four main targets, taxes on expenditures is ordinarily least relevant to the investment process.