Question

Question 2:

Only qualified dividends are taxed as capital gains.

1. State which code section defines qualified dividends and download such authority for this assignment

Answer 1

The code section that defines qualified dividends is the 26 U.S. Code § 1 - Tax imposed.

As per this code qualified dividend income shall not include any amount which the taxpayer takes into account as investment income under section 163(d)(4)(B).

The section has defined qualified dividend as dividends received during the taxable year from (i): domestic operations and (ii): qualified foreign corporations. Qualified foreign corporations means any foreign corporation if (i): such corporation is incorporated in a possession of the United States, or (ii): such corporation is eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary determines is satisfactory for purposes of this paragraph and which includes an exchange of information program.

Source: 26 USC § 1(h)(11)