Which One of the Following Distributions Is Nontaxable

question 6

Multiple Choice

Which one of the following distributions is nontaxable?

• A) Mutual fund distributions from its net realized long-term capital gains in the amount of $1,000. You have an adjusted basis of $10,000 in the mutual fund.
• B) Return of capital distribution from a utility company in the amount of $2,000. You have a zero basis in this stock.
• C) Dividend on insurance policy in the amount of $1,000. As of the date of this dividend your net premiums exceed the total dividends by $3,500.
• D) Your share of an ordinary dividend received by an S corporation in the amount of $25,000.

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Definitions:

Drugs

Substances used for medication or in the preparation of medication, but can also refer to illegal narcotics affecting the mind or body.

Reagan Revolution

A period of substantial political, economic, and social change in the United States during the presidency of Ronald Reagan (1981-1989), characterized by conservative policies, tax cuts, deregulation, and a focus on free-market capitalism.

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Advocate for freedoms and rights of individuals, often emphasizing equality, democracy, and the importance of a social safety net.

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Ideologies that emphasize preserving tradition and established institutions, often resisting changes to social, cultural, and economic norms.