Identifying qualified dividends
and helping taxpayers meet the requirements for qualified dividend
status are valuable client services.
Based on the company's current projections for the fiscal year ending 30 June 2015, its preferred stock dividends are expected to be treated as qualified dividend
income and that a portion of its cash dividends on common stock will be treated as a return of capital and the remainder as qualified dividend
corporation or a qualified foreign corporation that are not specifically excepted from qualified dividend
treatment on stock that a taxpayer has held for a certain period.
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
For Federal income tax purposes, approximately 78% of the 2011 distributions will be characterized as long-term capital gains and 22% as qualified dividend
As in 2010, late-year congressional negotiations could lead to extensions of current capital gains and qualified dividend
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
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