If a mutual fund distributes at least ____ percent of its taxable income to shareholders, the fund is exempt from taxes on dividends, interest, and capital gains distributed to shareholders.
A)25
B)50
C)75
D)90

Question

If a mutual fund distributes at least ____ percent of its taxable income to shareholders, the fund is exempt from taxes on dividends, interest, and capital gains distributed to shareholders.
A)​25
B)​50
C)​75
D)​90

Quizplus · Accepted Answer

A mutual fund must distribute at least 90 percent of its taxable income to shareholders to be exempt from taxes on dividends, interest, and capital gains distributed to shareholders. This requirement is part of the regulations that allow mutual funds to avoid being taxed at the fund level on income that is passed through to the shareholders.

If a Mutual Fund Distributes at Least ____ Percent of Its