Long-term capital gains treatment serves as encouragement for investors to buy

Question

Quizplus · Accepted Answer

Long-term capital gains treatment provides a tax incentive for investors to hold onto their investments for a longer period of time. Growth stocks, which have the potential for high returns over the long-term, would be a good choice for investors looking to take advantage of this tax benefit. Municipal bonds and U.S. government bonds are not subject to capital gains taxes, so the tax treatment is not relevant to these investments. High yield stocks may also be a good choice for some investors, but the long-term capital gains treatment alone is not sufficient to identify them as the best choice.

Long-Term Capital Gains Treatment Serves as Encouragement for Investors to Buy