Which of the following is true regarding tax-advantaged assets?
A)They are typically subject to excise taxes to account for their low explicit taxes.
B)A corporate bond is typically considered a tax-advantaged asset.
C)They are often subject to implicit taxes.
D)A corporate bond is typically considered a tax-advantaged asset. They are often subject to implicit taxes but they are not typically subject to excise taxes to account for their low explicit taxes.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Tax-advantaged assets, such as retirement accounts and municipal bonds, are often subject to implicit taxes. This means that although they may have lower explicit taxes, such as income or capital gains taxes, they may still be subject to other fees or restrictions that reduce their overall tax benefits. They are not typically subject to excise taxes, as excise taxes are typically imposed on specific goods or services rather than overall investment vehicles like tax-advantaged assets. A corporate bond is not typically considered a tax-advantaged asset as it is subject to standard income and capital gains taxes.

Which of the Following Is True Regarding Tax-Advantaged Assets