Nontaxable Dividends

AAA

DEFINITION of 'Nontaxable Dividends'

Dividends from a mutual fund or some other regulated investment company that are not taxed. Taxes are not paid out because the fund invests in municipal and other tax exempt investments.

INVESTOPEDIA EXPLAINS 'Nontaxable Dividends'

The mutual fund must invest over 50% of its capital into tax exempt investments for the dividends to be classified as nontaxable.

RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Gross Dividends

    Similar in concept to gross income, gross dividends are the sum ...
  3. Ordinary Dividends

    A share of a company's profits passed on to the shareholders ...
  4. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  6. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
RELATED FAQS
  1. What is the difference between preference and ordinary shares?

    Preference shares, also known as preferred shares, have the advantage of a higher priority claim to the assets of a corporation ... Read Full Answer >>
  2. What is the difference between record date and ex-dividend date?

    The record date of a stock and the ex-dividend date are both important terms that relate to which investors receive dividends ... Read Full Answer >>
  3. What is the difference between record date and payable date?

    Record and payable dates are important to keep track of because they relate to dividends earned and paid out to investors ... Read Full Answer >>
  4. What are the best mutual funds for investing in the electronics sector?

    Within the technology sector, the electronics industry continues to experience growth as the technology that supports producing ... Read Full Answer >>
  5. Where can I find the past record dates for a company's cash or stock dividend?

    Companies make a record when stock and cash dividends.are posted. In instances where stock is traded close to the dividend ... Read Full Answer >>
  6. How can you use a debt service coverage ratio (DSCR) to evaluate municipal bonds?

    Municipal bonds offered as debt securities from states, cities and other municipalities offer investors an opportunity to ... Read Full Answer >>
Related Articles
  1. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  2. Investing

    3 Top Pharma Stocks that Pay Regular Dividends

    The low down on three big name, dividend-paying pharma stocks.
  3. Trading Strategies

    Top 3 High Yield Stocks with Growth Potential

    High yield and growth potential don't often go hand in hand, except when it comes to these three stocks.
  4. Professionals

    Target Date Funds: More Popular, Cheaper Than Ever

    How target date funds can help investors weather volatility when it comes to saving for retirement.
  5. Options & Futures

    Writing Covered Calls On Dividend Stocks

    Writing covered calls on stocks that pay above-average dividends is a strategy that can be used to boost returns on a portfolio, but it carries some risk.
  6. Personal Finance

    Should You Track The Cost Of Retirement Income?

    Today, workers face a challenge when saving for retirement, because retirement income is getting more expensive, and the savings are not keeping up.
  7. Mutual Funds & ETFs

    Is the PowerShares (PFEM) ETF a Good Bet Now?

    What you need to know if you are considering trading PowerShares Fundamental Emerging Markets Local Debt ETF.
  8. Mutual Funds & ETFs

    Anatomy of Emerging Markets Debt ETF (EMLC)

    This emerging market bond ETF offers a high yield, but there are dangers. Find out why.
  9. Trading Strategies

    How to Pick the Best Dividend Stocks

    Dividend stocks can make you rich, but you have to be patient.
  10. Options & Futures

    5 Gold Stocks that Pay Regular Dividends

    Five dividend paying gold stocks to put on your watch list.

You May Also Like

Hot Definitions
  1. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  2. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  3. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  4. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  5. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
  6. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
Trading Center