A Safe and Easy Way for a Taxpayer to Avoid

question 59

True/False

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

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Definitions:

Non-cumulative

Describes preferred stocks where dividends not declared in a given period do not accumulate and are not required to be paid in the future.

Nonparticipating

In insurance, refers to a policy that does not entitle the policyholder to share in the surplus profits of the insurer.

Participating

In finance, it often refers to securities or policies that allow owners to receive dividends, or share in profits beyond a specified amount.

Cumulative

Refers to something increasing in quantity, degree, or force by successive additions, often used in the context of cumulative dividends or interest.