GENERAL KNOWLEDGE

Detailed explanation-1: -A dividend is the distribution of a company’s earnings to its shareholders and is determined by the company’s board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

Detailed explanation-2: -Yes, dividends are taxable as income. This income is taxable as per the applicable income tax slab rate of the shareholder.

Detailed explanation-3: -Dividends are considered portfolio income, which is a type of passive income, but the IRS stipulates many rules around what can be considered passive or not.

Detailed explanation-4: -Dividends Are Considered Assets for Shareholders Cash dividends are considered assets because they increase the net worth of shareholders by the amount of the dividend.

Detailed explanation-5: -All dividends paid to shareholders must be included on their gross income, but qualified dividends will get more favorable tax treatment. A qualified dividend is taxed at the capital gains tax rate, while ordinary dividends are taxed at standard federal income tax rates.