Investment and Finance
The most frequently asked tax questions related to Investment and Finance
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Answer Tax QuestionsInvestments & Financial Planning
I bonds- maximum purchase
Asked Monday, November 13, 2000 by an anonymous user
The maximum amount of I bonds an individual may buy each year is $10,000 in electronic bonds and $5,000 in paper I bonds. Federal I bonds cannot be exchanged for Federal HH bonds like Federal EE bonds can be.
Investments & Financial Planning
How long do Federal EE and I bonds earn interest for ?
Asked Monday, November 13, 2000 by an anonymous user
Federal EE and I bonds earn interest for 30 years. The interest rate is reset every 6 months for each bond. You do not have to report the interest earned as income on your tax return until you cash the bond in or it reached its final maturity, whichever comes first.
Investments & Financial Planning
How is the interest on Federal EE and I bonds taxed ?
Asked Monday, November 13, 2000 by an anonymous user
The interest earned on your savings bonds is subject to federal income tax, which can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. Savings bonds are subject to estate, inheritance, gift, or other excise taxes, whether federal or state.
Special tax benefits are available to qualified owners of EE Bonds under the Education Savings Bond Program.
Investments & Financial Planning
In reference to the stock market , what are Warrants ?
Asked Monday, November 13, 2000 by an anonymous user
Equity securities include common stocks, preferred stocks, securities convertible into common stocks, and rights and warrants to subscribe for the purchase of common stocks. Equity securities may be listed on a stock exchange or NASDAQ National Market System or unlisted.
Warrants are rights to purchase securities at a specified time at a specified price.
Warrants are rights to purchase securities at a specified time at a specified price.
Investments & Financial Planning
In reference to the stock market , what are Equity securities?
Asked Monday, November 13, 2000 by an anonymous user
Equity securities include common stocks, preferred stocks, securities convertible into common stocks, and rights and warrants to subscribe for the purchase of common stocks. Equity securities may be listed on a stock exchange or NASDAQ National Market System or unlisted. Warrants are rights to purchase securities at a specified time at a specified price.
Investments & Financial Planning
In reference to the stock market , what is a Derivative ?
Asked Monday, November 13, 2000 by an anonymous user
Derivative instruments are financial contracts whose value is based on an underlying security, a currency exchange rate, an interest rate or a market index. Many types of instruments representing a wide range of potential risks and rewards are derivatives, including futures contracts, options on futures contracts, and forward currency contracts.
Investments & Financial Planning
In reference to the stock market , what are Fixed income securities ?
Asked Monday, November 13, 2000 by an anonymous user
Fixed income securities are securities that pay interest at set times at either fixed, floating or variable rates, or which are issued at a discount to their principal amount instead of making periodic interest payments. Fixed income securities include corporate bonds, debentures and other similar corporate debt instruments, zero coupon bonds and variable master demand notes.
Investments & Financial Planning
In reference to the stock market , what is Foreign securities risk?
Asked Monday, November 13, 2000 by an anonymous user
Foreign securities risk occurs because foreign securities are generally more volatile and less liquid than U.S. securities in part because of greater political and economic risks and less public information available about the foreign countries.
Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers.
The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.
Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers.
The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.
Investments & Financial Planning
In relation to the stock market , what is Interest rate risk ?
Asked Monday, November 13, 2000 by an anonymous user
Interest rate risk is an increase in prevailing interest rates will cause fixed income securities held by a Mutual fund to decline in value. Longer term bonds are generally more sensitive to interest rate changes than shorter term bonds. Generally, the longer the average maturity of the bonds held by a mutual fund, the more the fund's share price will fluctuate in response to interest rate changes.
