Nontaxable Dividends

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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 ?
To implement the NOL rights plan, the Capstone board declared a non-taxable dividend of one preferred share purchase right for each outstanding share of its common stock, which will be paid to the stockholders of record at the close of business on May 16.
The rights will be distributed as a non-taxable dividend and will expire one year from adoption.
To implement the Rights Plan, the Contango Board of Directors declared a non-taxable dividend of one preferred share purchase right (a "Right") for each outstanding share of its common stock.
The corporation will benefit from a charitable deduction against its income for the year from taxes reduced to one fourth of the capital gain, and the shareholder will receive the difference in the form of non-taxable dividends.