Question

Another benefit DRIP investors have is the exemption of tax payments on their dividend incomes.

A) True
B) False

Answer 1

The statement that DRIP investors are tax-exempt on dividends is false, as dividends are typically subject to taxes. The provided exercises touch on various historical truths about taxation, sharecropping, proprietary colonies, and Revolutionary War soldiers' compensation.

Step-by-step explanation:

The statement that DRIP investors are exempt from paying taxes on their dividend incomes is false. Dividend Reinvestment Plans (DRIPs) allow investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date. However, these dividends are typically taxable in the year they are paid, unless the investments are in a tax-advantaged account such as an IRA or 401(k).

Regarding the provided reference exercises, various historical topics are covered:

• The colonists were opposed to the way taxes were applied rather than the principle of taxation itself. (Exercise 7.3.1)
• Sharecroppers indeed paid their rent with shares of their crops. (Exercise 17.3.3)
• In a proprietary colony, proprietors had other responsibilities besides just collecting profits. (Exercise 5.2.2)
• Revolutionary war soldiers were not well rewarded for their service. (Section 8.4.6 - p363)

These historical facts illuminate aspects of early American history and the economic and social conditions of the time.