Dividends taxed at a 15% rate are not considered investment income for purposes of the investment interest expense limitation.

Question

Quizplus · Accepted Answer

This statement is true. Dividends taxed at a 15% rate, which includes qualified dividends, are not considered as investment income for the purpose of the investment interest expense limitation. This means that taxpayers cannot deduct investment interest expenses that exceed their net investment income, but they can still deduct the full amount of their investment interest expenses if their only investment income is qualified dividends taxed at the 15% rate or lower.

Dividends Taxed at a 15% Rate Are Not Considered Investment