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"___________ are not taxable because they are considered a return of excess premium."

1 Answer

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Answer:

DIVIDENDS DISTRIBUTED BY A MUTUAL INSURANCE COMPANY are not taxable because they are considered a return of excess premium.

Step-by-step explanation:

Dividends distributed by corporations are generally taxed as ordinary income, but dividends distributed by mutual insurance companies are considered a return of premium and therefore are not taxed.

Mutual insurance companies are companies which are owned by its policyholders.

User Sarath Mohan
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