Author Topic: Dividends  (Read 1900 times)

Exflyboy

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Dividends
« on: February 01, 2014, 07:50:51 PM »
So having done some tax research with the help of a marvelous gentlemen on the forum it appears the the after tax stash should if at all possible generate Qualified dividends .,.. not ordinary dividends.

The rational is that if you are in the 15% tax bracket (which I will be next year) the Non Q divs are taxed at zero %, but ordinary divs are counted as regular income.

My Vanguard Etf's accounts and Amertrade stock accounts generate about 50% of both divs and Q divs.

I have no idea what generate what kind of Dividend and why... Thus how to maximise my generation of Q Dvis.

Can someone enlighten me?

Thanks

Frank

Psychstache

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Re: Dividends
« Reply #1 on: February 01, 2014, 08:06:07 PM »
Quote
Qualified Dividends

Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. They should be shown in box 1b of the Form 1099-DIV you receive.

The maximum rate of tax on qualified dividends is:

0% on any amount that otherwise would be taxed at a 10% or 15% rate.

15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39.6%.

20% on any amount that otherwise would be taxed at a 39.6% rate.

To qualify for the maximum rate, all of the following requirements must be met.

The dividends must have been paid by a U.S. corporation or a qualified foreign corporation. (See Qualified foreign corporation , later.)

The dividends are not of the type listed later under Dividends that are not qualified dividends .

You meet the holding period (discussed next).

Holding period.   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. See the examples, below.

From IRS Publication 550

http://www.irs.gov/publications/p550/ch01.html#en_US_2013_publink100010066

Exflyboy

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Re: Dividends
« Reply #2 on: February 01, 2014, 08:15:36 PM »
Perfect thankyou

Frank