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Why Are Stock Dividends Generally Nontaxable? Under What Circumstances Are

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


Definitions:

Marginal Utility

The increased value or pleasure an individual obtains from using another unit of a certain service or good.

Total Satisfaction

A measure of the overall happiness or contentment derived from consuming a combination of goods and services.

Consumer's

Related to or involving the actions and decisions of individuals who purchase goods and services for personal use.

Utility

a measure of satisfaction or happiness that a person derives from consuming goods and services.

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