Which of the following statements is true?
A)Income character determines the tax year in which the income is taxed.
B)Income character depends on the taxpayer's filing status.
C)Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income.
D)A taxpayer selling a capital asset at a gain recognizes ordinary income.

Question

Quizplus · Accepted Answer

Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income. The tax rate for qualified dividend income is the same as the capital gains tax rate, which is lower than the tax rate for ordinary income. Therefore, Choice C is the only true statement. Choices A, B, and D are incorrect statements.

Which of the Following Statements Is True