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.
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Friedman also advises investors to take advantage of the lower tax rates on long-term capital gains and qualifying dividend income.
The average total year-end assets were over $24 billion, while the average amount repatriated was roughly $429 million, and the average qualifying dividend was $370 million.
(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.
Dividends: Qualifying dividend generally include those paid by domestic or a foreign corporation incorporated in a country eligible for the benefits of a comprehensive income tax treaty that contains an exchange-of-information program.
The company added that the dividend qualifies as eligible in Canada and as a qualifying dividend in the US.
These dividends qualify as eligible dividends in Canada and qualifying dividends in the United States.
This is because traditional IRA withdrawals are taxed at ordinary income rates, regardless of whether the underlying asset would be accorded more favorable tax treatment, such as reduced rates on long-term capital gains or qualifying dividends, or even tax-free interest on municipal bonds.
(1) For 2008 only, the tax rate on qualifying dividends for individuals in the 15% or 10% bracket is reduced to zero.
The taxation of dividends received by companies is to a large extent covered by an existing Directive (the Parent-Subsidiary Directive - 90/435/EEC) which provides for exemption of withholding taxes on the payment of qualifying dividends and credit or exemption in the hands of the company receiving them).