Question

your customer feels overburdened with taxes and would like relief. after you discuss the abc municipal bond fund with her and advise her of the tax treatment of the distributions, which of the following statements would be the correct advice? a) dividends and capital gains are federally tax exempt and may even be state exempt if issues in the portfolio are issues in her state of residence. b) both dividends and capital gains are taxable at favorable capital gains rates. c) dividends are federally tax exempt, but capital gains are subject to taxation. d) dividends and capital gains are federally tax exempt, but only the dividends may qualify for state exemption.

Answer 1

(c) dividends are federally tax exempt, but capital gains are subject to taxation.

What is dividend?

A dividend is a reward paid to the shareholders for their investment in a company's equity, and it usually originates from the company's net profits.

A dividend is also the distribution of some of a company's earnings to a class of its shareholders. Dividends are usually paid in the form of a dividend check. However, they may also be paid in additional shares of stock.

Monthly dividend stocks are securities that pay a dividend every month instead of quarterly or annually. More frequent dividend payments mean a smoother income stream for investors.

They're paid out of the earnings and profits of the corporation. Dividends can be classified either as ordinary or qualified. Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.

In order to collect dividends on a stock, you simply need to own shares in the company through a brokerage account or a retirement plan such as an IRA. When the dividends are paid, the cash will automatically be deposited into your account.

To learn more about Dividends from the given link

brainly.com/question/2960815

#SPJ4