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 ?

FTB,(46) a Superior Court held that California's interest offset statute violates the Due Process, Commerce and Equal Protection Clauses, because it requires a dollar-for-dollar offset of otherwise deductible interest expenses with nontaxable dividend income of foreign corporations.

Current corporate income tax developments

Recommendation: Permit taxpayers electing the 100 percent dividends-received deduction under section 243(a)(3) to attach a statement to its consolidated return reporting the distribution of a nontaxable dividend and to supply additional information upon audit, if necessary.