Nontaxable dividends are dividends from a regulated investment company (mutual fund) that were earned by the fund as interest from tax-exempt state and municipal debt obligations and other exempt obligations. For dividends to be tax-free, at least 50% of the regulated investment company's assets must be invested in tax-exempt obligations.
A Revenue Anticipation Note (RAN) is a short-term debt issue by a municipal entity, used to finance urgent needs and repaid with anticipated revenues such as sales taxes. Interest earned on RANs is generally tax-free for holders.
