Even If Both Dividends and Capital Gains Are Taxed at the Same

question 66

Multiple Choice

Even if both dividends and capital gains are taxed at the same ordinary income tax rate,the effect of each type of tax is different because:

• A)capital gains are actually taxed,while dividends are taxed on paper only.
• B)dividends are taxed when distributed,while capital gains are deferred until the stock is sold.
• C)both dividends and capital gains are taxed every year.
• D)both A and C.

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Definitions:

Bootstrapping

A self-starting process that is supposed to proceed without external input, often used to describe startups that grow without major external funding.

Penny Pinching

The act of being very careful with money, often by trying to reduce spending.

Seed Money

Initial funding used to start a business, often provided by angel investors, friends, or family.

Resources

Assets, materials, or other necessities that are available for use or could be used to achieve goals.