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If hold a stock, you pay 0 tax on share buyback gains. Not so for dividends.
by blazespin 9y ago
If hold a stock, you pay 0 tax on share buyback gains. Not so for dividends.
- deleted 9y ago[deleted]
- tedsanders 9y agoCapital gains taxes are typically paid when shares are sold and gains are realized.
- valuearb 9y agoIt's the exact same rate once you sell.
- slg 9y agoSure, but you dictate when you sell and must take the dividend whenever it is offered. It is always easier to plan for something you trigger manually rather than something forced upon you.
- jdmichal 9y agoAt the cost of having none of that money in your pocket until you sell.
- stouset 9y ago…which you could just do immediately if it's that big a deal. This is not a choice made for retail investors who hold a handful of shares — it won't make a noticeable difference for that class of investor either way. It does, however, make a huge difference for institutional investors and for large shareholders.
- Fomite 9y agoOnly if you believe that the capital gains rate will not be different when you sell. Personally, I prefer dividends rather than buybacks from Apple.
- stouset 9y agoThen sell shares in an proportionate amount to the share price increase due to buyback. It's the same either way, you just have the choice of whether to realize those gains now or later.
- deleted 9y ago[deleted]