Are there holding period requirements associated with distributions of qualified dividends?
The general holding period rule for distributions of qualified dividends is that the taxpayer must hold the security for at least 61 days during the 121-day period surrounding the ex-dividend date. This general rule, however, means that a holding period requirement applies at both the mutual fund-level and the shareholder-level in the case of distributions from mutual funds. At the fund-level, for dividends to be treated as qualified dividends taxed at the lower rates, the mutual fund must have held the stock unhedged for at least 61 days during the 121-day period surrounding the ex-dividend date. Fidelity reports amounts that the fund received as potential qualified dividends when it mails you a Form 1099-DIV in early 2005. At the shareholder-level, the holding period requirement must also be met. As such, a shareholder must have held the fund’s shares unhedged for at least 61 days during the 121-day period surrounding the ex-dividend date. To determine the holding period, begin count
