Recent Changes in the Tax Code Have Changed the Taxation

question 27

Multiple Choice

Recent changes in the tax code have changed the taxation of cash dividends and capital gains as follows:

• A) cash dividends are taxed at the ordinary rate and all capital gains at a special rate of 50%.
• B) all cash dividends and capital gains as ordinary income.
• C) capital gains as ordinary income and cash dividends for a stock owned more than 18 months at the special rate of 20%.
• D) Short term gains and cash dividends as ordinary income, capital gains earned over less than 18 months at a maximum rate of 28% and capital gains earned over more than 18 months at a 20% rate.

---

Definitions:

Punctuated Correctly

Refers to the correct application of punctuation marks in a sentence, according to the rules of grammar.

Ice Cream

A sweet, frozen dessert made from cream or milk and flavored with a variety of ingredients.

Flavor

The combination of taste and smell sensations evoked by a substance in the mouth.

Punctuated Correctly

The placement of punctuation marks in a text following grammatical rules to ensure clarity and understanding.