A taxpayer who invests in a growth stock rather than a stock that pays an annual dividend is engaging in tax planning based on the:

Question

Quizplus · Accepted Answer

Choosing a growth stock, which typically does not pay dividends and instead reinvests profits to grow the company, over a dividend-paying stock is a form of tax planning based on the time period variable. This strategy defers taxes until the stock is sold, potentially at a more favorable long-term capital gains tax rate, rather than paying taxes annually on dividends received.

A Taxpayer Who Invests in a Growth Stock Rather Than