Credit Union share accounts pay dividends which are:

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Prepare for the Qualified Financial Adviser Exam 2 with flashcards and multiple choice questions, complete with hints and explanations. Get exam-ready and increase your confidence with our comprehensive study materials!

Multiple Choice

Credit Union share accounts pay dividends which are:

Explanation:
Dividends on credit union shares are treated as deposit-type income for tax purposes, so they fall under the Deposit Interest Retention Tax system. DIRT is the tax that credit unions withhold at the point of payment, so the dividend you receive is net of this tax and is considered already taxed. It isn’t tax-exempt, and it isn’t ordinary income taxed later, which is why DIRT is the correct treatment.

Dividends on credit union shares are treated as deposit-type income for tax purposes, so they fall under the Deposit Interest Retention Tax system. DIRT is the tax that credit unions withhold at the point of payment, so the dividend you receive is net of this tax and is considered already taxed. It isn’t tax-exempt, and it isn’t ordinary income taxed later, which is why DIRT is the correct treatment.

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