answersLogoWhite

0

Non-dividend distributions refer to payments made by a corporation to its shareholders that are not classified as dividends. These distributions can include returns of capital, which reduce the shareholder's basis in the stock, or distributions from accumulated earnings that do not meet the criteria for dividends. As a result, they typically do not incur immediate tax consequences for shareholders, but can affect the tax treatment of future gains when the shares are sold. It's important for shareholders to understand these distributions for accurate tax reporting and investment basis calculations.

User Avatar

AnswerBot

3w ago

What else can I help you with?

Related Questions

Dividend policy of jollibee?

Jollibee Foods Corporation has a dividend policy that aims to distribute a minimum of 30% of its annual net income to its shareholders. The company has a history of consistent dividend payments and a commitment to providing shareholders with returns on their investment. Jollibee's dividend policy is guided by its aim to balance capital reinvestment for growth and rewarding shareholders through dividend distributions.


What is another term for dividend?

Another term for dividend is "distribution." In the context of finance, it specifically refers to the portion of a company's earnings that is paid to shareholders. Dividends can also be classified as regular, special, or interim distributions, depending on the circumstances of the payment.


What is dividend balancing?

Dividend balancing refers to the practice of adjusting dividend payments by a company to maintain a consistent payout ratio or to address imbalances between different classes of shareholders. It ensures that the dividend payments are distributed fairly and in line with the company's financial health and profitability. This can involve increasing or decreasing the dividend payout or issuing additional dividends to equalize the distributions among shareholders.


What is a non-distributable reserve?

A non-distributable reserve is one which is not available for distribution to shareholders as a dividend.


What is the effect on shareholders wealth if the company didn't pay the dividend?

Non payment of dividend is to be differentiated from non declaration of dividend. Some companies, even though in profits, prefer to retain the profit in the business than disbursing dividends. This in facts maximises the shareholders wealth, due to the effect of compounding. Otherwise, if non payment of dividend is due to absence of sufficient profits, then the shareholders wealth diminishes.


Can cash dividend be declared more than profit?

No, a cash dividend cannot be declared in excess of a company's available profits. Dividends are typically paid from retained earnings, which represent the cumulative profits that have not been distributed to shareholders. If a company declares a dividend greater than its profits, it could lead to financial instability and potential legal issues, as it may violate corporate laws or regulations regarding dividend distributions.


What is non normal distribution?

A distribution that is NOT normal. Most of the time, it refers to skewed distributions.


What is the difference between stock appreciation rights and phantom stock?

A holder of SAR's is not entitled to dividends/distributions, whereas...a holder of phantom stock will be entielted to an equivalent dividend/distribution payment.


Meaning of non-trade investments?

investment made for the purpose of earning dividend/interest .that is called non-trade investment.


Which mutual fund should I pick?

You need to do your research before choose a mutual fund. Find a fund that offers dividend distributions. A fund that invests heavily in stocks is good for capital growth.


What is a distributable reserve?

A non-distributable reserve is one which is not available for distribution to shareholders as a dividend.


What is reserve distribution?

A non-distributable reserve is one which is not available for distribution to shareholders as a dividend.