Elsie and Elmer Received $400 in Qualifying Dividends from the Virginiana

question 3

Multiple Choice

Elsie and Elmer received $400 in qualifying dividends from the Virginiana Mutual Fund.Elmer and Elsie filed a joint income tax return for 2011 reporting $40,000 of taxable income including the dividends.If their tax rate on ordinary income is 15 percent,what is the tax rate for the dividends?

• A)15 percent
• B)25 percent
• C)zero percent
• D)5 percent
• E)None of the above

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Definitions:

Socially Responsible Fund

An investment fund that seeks to generate financial returns while also considering social and environmental criteria.

Pension Fund Manager

A professional who oversees the investment strategy and operations of a pension fund, aiming to ensure the financial stability and growth of the fund to meet future liabilities.

Index Fund

A type of mutual fund or exchange-traded fund (ETF) designed to replicate the performance of a specific market index.

Whole-Life Insurance

A type of permanent life insurance policy that offers a death benefit alongside a savings account component, covering the insured for their entire life.