Nontaxable Dividends

Nontaxable Dividends

Dividends from a mutual fund or other investment company that are not subject to federal taxation. In order to issue nontaxable dividends, more than 50% of the fund's liquidity must be placed in municipal bonds or some other security that is tax-exempt.
References in periodicals archive ?
We delete any distributions that contain both taxable and nontaxable dividends.
amp; Tax Code Section 24425 and precedents mandated the disallowance of expenses allocable to nontaxable dividends before income allocation or apportionment.
In addition, some consolidated groups may face the prospect of paying nontaxable dividends because of the change in the rules that previously created "phantom E&P.
Such nontaxable dividends will reduce the tax basis of the Shares, and therefore, the gain or loss recognized on the sale of such Shares will be increased or reduced accordingly.