Qualified Dividend

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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 ?
7) This degree of flexibility would have allowed taxpayers to designate high-taxed dividends not only to fill the base period amount, but also to make up the taxable portion of the total qualifying dividend amount.
Furthermore, a foreign corporation that was a FPHC in 2003 or 2004 could not distribute as a qualifying dividend its earnings and profits that were previously accumulated in years in which it was not a FPHC.
24402 deduction is limited by 24402(b), and the remainder of the qualifying dividend may be deductible under Sec.
Section 302 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) reduced the income tax rate for qualifying dividends received by individuals to 15% (5% for taxpayers in the 10% mid 15% tax brackets).