Introduction

Welcome to Tax Considerations: the unit that connects investment decisions to their real-world tax consequences.

Exam Weight: Part of 30 questions

What You'll Learn

In this unit, you'll cover:

• Individual Income Tax Fundamentals: Capital gains and losses, qualified dividends, tax basis, marginal brackets, Alternative Minimum Tax (AMT), retirement plan distributions, and how investment income affects government benefits
• Entity Taxation: How C-corporations, S-corporations, partnerships, trusts, and estates are taxed differently
• Wealth Transfer Taxes: Gift tax rules, estate tax fundamentals, the step-up in basis, and the unified lifetime exemption

Why This Matters

Every investment recommendation carries tax consequences. An adviser who ignores the tax impact of a trade, a distribution, or an estate transfer is giving incomplete advice. On the Series 66 exam, you need to know:

• Which gains qualify for preferential rates
• How the wash sale rule blocks tax-loss harvesting
• Why the step-up in basis at death changes the math on holding appreciated assets

These concepts appear both as standalone questions and embedded in scenario-based questions throughout the exam.