In Order to Shift the Taxation of Dividend Income from a Parent

question 19

Multiple Choice

In order to shift the taxation of dividend income from a parent to a child

• A)the parent must direct the corporation to pay the dividend to the child.
• B)the parent must transfer ownership of the stock to the child.
• C)the parent can deposit the dividend in the child's bank account.
• D)all of the above will result in shifting the taxation to the child.

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Definitions:

Asset Allocation

The process of dividing investments among different asset categories, such as stocks, bonds, and cash, to optimize risk and return.

Equities

Financial assets representing ownership interest in a company, typically in the form of shares of stock.

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Real Asset

Tangible property such as real estate, commodities, and physical goods that have intrinsic value due to their substance and physical properties.