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

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

If dividends are treated as 'qualified', they are taxed at the more favorable capital gains rates...

If dividends are treated as 'qualified', they are taxed at the more favorable capital gains rates than at ordinary income rates. Discuss the requirements for dividends to be treated as 'qualified dividends.'

During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.)

During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset Market Value Tax Basis Holding Period L stock $ 53,000 $ 42,500 > 1 year M stock 31,000 40,500 > 1 year N stock 33,000 23,500 < 1 year O stock 29,000 34,500 < 1 year Antiques 10,000 5,500 > 1 year Rental home 303,000* 91,500 > 1 year *$30,000 of the gain is 25...

Given the same personal tax rate on dividends and capital gains, a stock repurchase: creates a...

Given the same personal tax rate on dividends and capital gains, a stock repurchase: creates a personal tax liability for the investor equivalent to that of a dividend. creates a personal tax liability for the investor that is lower than that of a dividend. Creates a personal tax liability for the investor that is higher than that of a dividend. is more highly taxed than a cash dividend. creates a tax liability even if the investor does not sell any...

Explain how the tax structures related to dividends, unrealized capital gains, and the deductibility of corporate...

Explain how the tax structures related to dividends, unrealized capital gains, and the deductibility of corporate debt influence the methods used by corporations to engage in investment.

Why are stock dividends and realized asset capital gains (longer than 1yr) considered Tax Preferenced?

Why do you think Congress has established different maximum tax rates on capital gains of individuals?...

Why do you think Congress has established different maximum tax rates on capital gains of individuals? Typically we think of capital gains in terms of the sale of investments, such as stocks and bonds. But through what other asset types do these rules apply? considering holding periods, and any other considerations.

Year Corporate Tax Rate Interest Income Average Rate on Equity Income Dividends Capital Gains 1971-1978 48% ...

Year Corporate Tax Rate Interest Income Average Rate on Equity Income Dividends Capital Gains 1971-1978 48% 70% 53% 70% 35% 1979-1981 46% 70% 49% 70% 28% 1982-1986 46% 50% 35% 50% 20% 1987 40% 39% 33% 39% 28% 1988-1990 34% 28% 28% 28% 28% 1991-1992 34% 31% 30% 31% 28% 1993-1996 35% 40% 34% 40% 28% 1997-2000 35% 40% 30% 40% 20% 2001-2002 35% 39% 30% 39% 20% 2003-2012 35% 35% 15% 15% 15% Use the data in the table,...

Assuming current tax rates ( Corp.tax 35%, Individual 39.6, Dividends and Capital gain 20%), identify the...

Assuming current tax rates ( Corp.tax 35%, Individual 39.6, Dividends and Capital gain 20%), identify the following as either true or false.Explain each answer. a. The annualized after-tax rate of return to investing in the corporate form increases with the length of the investors holding period b. The annualized after-tax rate of return to investing in the partnership form increases with the length of the partners holding period c. If a corporation paid out its entire after-tax profits as dividends...

The idea of tax efficiency is based on how much tax is due to capital gains...

The idea of tax efficiency is based on how much tax is due to capital gains stock or mutual fund investors pay of their investments. You become interested in this in one of your economic development classes. You collect data on the variables (percentage of investments in energy and tax efficiency). The basic data for the variables is presented below. What is the predictor (independent x) variable? What is the response (dependent y) variable? Compute the value of r. Based...

The expected pretax return on three stocks is divided between dividends and capital gains in the...

The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Stock Expected Dividend Expected Capital Gain A $0 $10 B 5 5 C 10 0 a. If each stock is priced at $145, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 45% (the effective tax rate on dividends received by corporations is 10.5%), and...

Question