Question

All the following investors generally receive a tax break on dividend income with the exception of:

O corporate shareholders.
O pension funds.
O trust funds.
O endowment funds.
O individuals.

Answer 1

Corporate shareholders usually do not receive a tax break on dividend income, unlike pension funds, trust funds, endowment funds, and individuals.

Step-by-step explanation:

A student asked which investors generally do not receive a tax break on dividend income.

The answer is that corporate shareholders typically do not receive a tax break on dividend income. Other entities such as pension funds, trust funds, endowment funds, and individuals usually have tax advantages or exemptions when it comes to dividends. Pension funds, for example, often have tax-exempt status, meaning they do not pay tax on dividends.

Additionally, certain accounts like 401(k)s allow individuals to invest with pre-tax dollars and defer taxes until withdrawal. Trusts and endowment funds often enjoy tax-exempt status as well, especially if they are associated with charitable objectives.