what is a non taxable distribution 
a non taxable distribution is a payment to its shareholders that is classified as a return of capital these distributions aren t paid from the company s earnings and aren t taxed until the investor sells stock in the company the bottom linein the world of finance a distribution generally refers to the disbursement of assets from a fund account or individual security to an investor by understanding the ins and outs of various types of distributions their purpose how they re used and how they work you won t be left scratching your head when you hear the term thrown around during your investing life 