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 and they are often subject to implicit taxes are correct but not they are typically subject to excise taxes to account for their low explicit taxes
E) None of these

Question

Quizplus · Accepted Answer

Tax-advantaged assets are typically subject to implicit taxes, meaning that while their explicit taxes may be low, there are other costs associated with owning them (such as lower returns due to tax-efficient investing strategies). A corporate bond is not typically considered a tax-advantaged asset as it is subject to taxation on the interest income received. Option A is incorrect as tax-advantaged assets are not subject to excise taxes specifically to account for their low explicit taxes.

Which of the Following Is True Regarding Tax-Advantaged Assets