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.
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.
We delete any distributions that contain both taxable and nontaxable dividends. We also exclude distributions that are combined with cash dividends or rights issues.
& Tax Code Section 24425 and precedents mandated the disallowance of expenses allocable to nontaxable dividends before income allocation or apportionment.
Secondly, it is a boon to smaller public businesses whose owners can now pay themselves nontaxable dividends and cancel taxable salaries.
1995) (the tax is "exactly the same amount" whether nontaxable dividends are treated as taxable income or are applied against interest expense).