Stocks

What Are Exempt Dividends?

A tax-free distribution from a mutual fund is known as an exempt-interest dividend. Mutual funds that invest in municipal bonds are generally connected with exempt-interest dividends. However, exempt-interest dividends may still be taxable to state income tax or the alternative minimum tax, even if they are not subject to federal income tax (AMT). Mutual funds …

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What Are Homemade Dividends And Why Would Investors Make Them?

The term “homemade dividends” refers to a type of investment income that is generated by selling a portion of an investor’s equity portfolio. To meet his financial goals, the investor sells some of his stock rather than waiting for the regular dividends. Assuming that a dividend is not yet due, a shareholder can sell some …

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