Flashcard Set Preview
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| 1 |
The accounts that assets are located in (i.e., the asset location) is
important for
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tax management.
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| 2 |
Speaking strictly from a tax management
standpoint, an investor would locate heavily taxed...
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taxable accounts.
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| 3 |
The value created by
the effective tax management of investment securities is referred to...
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tax alpha.
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| 4 |
In addition to examining location as a source of tax minimization, we can
also examine an...
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trading behavior.
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| 5 |
Specifically, we can delineate four
types of equity investors:
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TradersActive investorsPassive investorsExempt investors
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| 6 |
Traders:
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the sole source of a trader’s gains are short-term gains
that are taxed on an annual...
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| 7 |
Active investors:
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active investors trade less frequently than
traders so that many of their gains are taxed...
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| 8 |
Passive investors:
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passive investors buy and hold equity so that
gains are deferred for the long-term and...
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| 9 |
Exempt investors:
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exempt investors hold all of their stock in
tax-exempt accounts, thereby avoiding taxation...
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