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 ?

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.

Planned giving: donating to charities is always smiled upon, but with the right plan, it can also be a valuable tax benefit for both individuals and corporations

* Effective for distributions on or after January 1, 2003, with respect to corporate earnings after 2000, public and private corporations would be permitted to distribute non-taxable dividends to their shareholders to the extent those dividends are paid out of income previously taxed at the corporate level.

Tax Executives Institute--U.S. Department of Treasury Office of Tax Policy liaison meeting: February 25, 2003