An individual's income for the year includes both dividend and interest payments.Which of these statements correctly applies to that individual's tax liability?

Question

Quizplus · Accepted Answer

Both dividend and interest payments are taxed at the personal level. The taxation of these payments depends on the individual's tax bracket and the type of account in which the investments are held. Dividends and interest payments received in taxable accounts are subject to income tax, while those received in tax-advantaged accounts are taxed differently. Taxes on these payments are not paid at the corporate level, as they are considered income to the individual receiving them.

An Individual's Income for the Year Includes Both Dividend and Interest