Asked by Tonii White on May 12, 2024
Verified
When an individual's marginal ordinary income tax rate is 25% or more and less than 39.60%,the tax rate on qualified dividends is:
A) 5%.
B) 15%.
C) 0%.
D) 10%.
Marginal Ordinary Income Tax Rate
The percentage of tax applied to your income for each tax bracket in which you qualify, increasing progressively as your income surpasses threshold amounts.
Qualified Dividends
Dividend payments received on shares of a corporation, taxed at a lower tax rate than regular income.
Tax Rate
The percentage at which an individual or corporation is taxed.
- Determine the taxation approach for different categories of dividends and unemployment benefits.
Verified Answer
PV
Pearl Vander WaalMay 14, 2024
Final Answer :
B
Explanation :
When an individual's marginal ordinary income tax rate is 25% or more and less than 39.6%, the tax rate on qualified dividends is 15%. This is higher than the 0% tax rate on qualified dividends for those in lower tax brackets, but lower than the 20% tax rate for those in the highest tax bracket. Therefore, the best choice is B) 15%.
Learning Objectives
- Determine the taxation approach for different categories of dividends and unemployment benefits.
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