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Distinguish between interest income and dividend income. Does their treatment differ for tax purposes? Which...

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Finance

Distinguish between interest income and dividend income. Does their treatment differ for tax purposes?

Which of the following is true regarding the differing treatment of dividend and interest income for tax purposes?(Select the best answer below.)

Interest income is included in gross income to determine taxable income but dividend income is not.

Neither interest income nor dividend income is included in gross income to determine taxable income.

Both interest income and dividend income are included in gross income to determine taxable income, but dividend income is taxed at lower rates.

Interest income is not included in gross income to determine taxable income but dividend income is.

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