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If you have any capital losses in a given year, you can use them to offset both your capital gains and up to $3,000 of ordinary income, including dividend income. The Bottom Line
Dividends paid to investors by corporations come in two kinds – ordinary and qualified – and the difference has a large effect on the taxes that will be owed. Ordinary dividends are taxed as ...
If you receive qualified dividend income, the capital gains tax rate is 20 percent, 15 percent or 0 percent depending on your income. It is often more profitable to receive qualified dividends ...
The category of a qualified dividend was created with the Jobs and Growth Tax Relief Reconciliation Act of 2003 ("JGTRRA"), that reduced all taxpayers' personal income tax rates and cut the tax rate on qualified dividends from the ordinary income tax rates to the lower long-term capital gains tax rates. At the same time the bill reduced the ...
The Capital Gains and Qualified Dividends Worksheet in the Form 1040 instructions specifies a calculation that treats both long-term capital gains and qualified dividends as though they were the last income received, then applies the preferential tax rate as shown in the above table. [5]
This means, any gain or loss realized by the partnership upon disposition within the time-frame of five years is treated as ordinary gain or loss (Sec. 724(b)). [30] Since inventory and accounts receivable are ordinary income assets in the hands of the taxpayer, they trigger the recognition of ordinary gain upon disposition.
Source: 401(K) 2013 Tax time is here again, and Uncle Sam wants his cut. While business development companies, or BDCs, enjoy very preferential tax treatment -- the industry avoids corporate-level ...
The qualified dividend tax rate was set to expire December 31, 2008; however, the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) extended the lower tax rate through 2010 and further cut the tax rate on qualified dividends to 0% for individuals in the 10% and 15% income tax brackets.