Why Are Stock Dividends Generally Nontaxable? Under What Circumstances Are

question 81

Essay

Why are stock dividends generally nontaxable? Under what circumstances are stock dividends taxable?

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Definitions:

Locum Tenens

A person who temporarily fulfills the duties of another; specifically, a physician or clergyman acting temporarily for another.

Res Ipsa Loquitur

Latin, meaning “the thing speaks for itself,” which is also known as the doctrine of common knowledge.

Respondeat Superior

Latin, meaning “let the master answer,” a doctrine under which an employer is legally liable for the acts of his or her employees, if such acts were performed within the scope of the employee’s duties.

Duces Tecum

a court order that requires an individual to produce documents or records for a legal proceeding.