Test - Senior Tax Speciali nvestment Income, Interest, and Dividends uestion 31

Question

Test - Senior Tax Speciali nvestment Income, Interest, and Dividends uestion 31 of 75. of the following best describes qualified dividends? O Dividend distributions that are considered a return of capital. O Ordinary dividends that are subject to the same maximum tax rate that applies to net capital gain. O Dividends that may be used to purchase additional shares in a corporation. O Dividends that are distributed when a corporation issues an additional amount of stock, usually as a percentage ot Mark for follow up uestion 32 of 75. a taxpayer elects to reinvest dividend income from a mutual fund investment, the dividend O Automatically taxed at a lower capital gains tax rate. s are: Treated as normal dividends and taxable in the year received D Not taxable until the fund is solod

Explanation / Answer

Qualified dividends:

Qualified dividends are those which are subject to tax on capital gains rate that are generally lower than ordinary Income tax rates. Unqualified dividends are taxed at ordinary rates.

So Option B best describes qualified dividends.

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