How do I determine which of the dividends reported as qualified dividends on Form 1099–DIV are eligible to be taxed at one of the lower federal long–term capital gain tax rates of 15% or 0%?
In order for the qualified dividends reported to you in Line 1b of Form 1099–DIV to be taxed at one of the lower 15% or 0% federal long–term capital gain tax rates (0% lowered from 5% after 12/31/2007), you had to have held the dividend–paying security unhedged for at least 61 days out of the 121–day period that begins 60 days before the ex–dividend date. If you did not hold the security unhedged for the requisite period, the dividends should be taxable at ordinary income tax rates as high as 35%. See Qualified Dividends for more information.
In order for the qualified dividends reported to you in column 1b of Form 1099–DIV to be taxed at one of the lower 15% or 0% federal long–term capital gain tax rates (0% lowered from 5% after 12/31/07), you had to have held the dividend–paying mutual fund unhedged for at least 61 days out of the 121–day period that begins 60 days before the ex–dividend date. If you did not hold the fund unhedged for the requisite period, the dividends should be taxable at ordinary income tax rates as high as 35%. See Qualified Dividends for more information.
Related Questions
- Is a corporation eligible to claim a dividends–received deduction with respect to qualified dividends reported in the Dividends and Distributions section of the Informational Tax Statement?
- How do I determine which of the dividends reported as qualified dividends on Form 1099–DIV are eligible to be taxed at one of the lower federal long–term capital gain tax rates of 15% or 0%?
- Are income dividends distributed by bond and money market funds eligible to be taxed at one of the lower federal long-term capital gain tax rates of 15% or 5%?
