Qualified Dividend

Qualified Dividend

In the United States, a dividend eligible for capital gains tax rather than income tax. This is advantageous to the investor as capital gains are usually taxed at a lower rate than ordinary income. To become a "qualified" dividend, the security from which the dividend derives must be held for at least 61 days during a certain 121-day period (for common stock) or for at least 90 days during a corresponding 181-day period. Also, the corporation paying the dividend must either be American or at least have stock readily tradable in American securities markets. See also: Ordinary dividend.
References in periodicals archive ?
As in 2010, late-year congressional negotiations could lead to extensions of current capital gains and qualified dividend tax rates.
Unless Congress takes action to extend the current rates, capital gains tax rates will increase from 15 percent to 20 percent, and the maximum tax rate for qualified dividend tax rates could nearly triple from 15 percent to 39.
Adjusted net capital gain also includes qualified dividend income (discussed below).
taxpayers to convert nonqualified dividend income into qualified dividend income.
For Federal income tax purposes, approximately 78% of the 2011 distributions will be characterized as long-term capital gains and 22% as qualified dividend income.
09 per share of qualified dividends reflects qualified dividend income received by American Capital from portfolio companies in 2009.
This has been greatly alleviated with the qualified dividend rate now at 15 percent, but I feel that in substance there was and still is a double tax in effect.
For Federal income tax purposes, approximately 74% of the 2011 distributions will be characterized as long-term capital gains and 26% as qualified dividend income.
Gain from the seller's receipt of cash or other "boot" in the exchange, whether treated as qualified dividend income or capital gains will still be taxed at the maximum 15 percent rate.
For Federal income tax purposes, approximately 93% of the 2011 distributions will be characterized as long-term capital gains and 7% as qualified dividend income.
The Service has issued final regulations (TD 9191) explaining how noncorporate taxpayers may elect to treat qualified dividend income as investment income when computing the investment interest deduction.
For Federal income tax purposes, approximately 82% of the 2010 distributions will be characterized as qualified dividend income (taxable at long-term capital gain rates) and 18% as ordinary income.

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