Rena purchased 200 shares of an equity mutual fund. During the year she received $3 per share

Question:

Rena purchased 200 shares of an equity mutual fund. During the year she received $3 per share in dividend distributions, $2 per share in capital gain distributions, and capital gains of $1100 when she sold the fund after owning it for eight months. What are the tax consequences of Rena’s ownership of this equity fund? Rena is in a 40 percent marginal tax bracket.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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