Tax rates on dividends and capital gains differ across investors for a variety of reasons including...

Tax rates on dividends and capital gains differ across investors for a variety of reasons including ________.

Select one:

A. investment horizon

B. income

C. tax jurisdiction

D. all of the above

Solutions

Expert Solution

The correct answer is all of the above

Dividend Income refers to the profit that is by the company to shareholders while capital gains refers to the profits that is eaned by investing in the securities for a period of time.

The Capital gain taxes differ on the basis of Short term capital gain and long term capital gain basis the former one has to pay large amount of taxes due to the short duration of the period while the long term capital gain is generally lower than short term capital gains while the dividends differs on the basis of type of shareholder which includes ordinary (Retail) investor and qualified investor, the ordinary investor generally comes in higher tax brackets while lower taxes is imposed on qualified investors. So, It proves that tax rates do differ on the basis of investment horizon and income of the Individual or corporations.

The dividends and capital gain tax differ on the basis of gtax jurisdiction. For example, In United States, Dividends Income is teated as capital gains while in some other place, it is considered as other income sources.

jeff jeffy answered 1 year ago

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