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You are right about the buyback allowing shareholders to delay the taxable event. But you are wrong that dividends are taxed at capital gains rate. They are t
by georgeecollins 7y ago
You are right about the buyback allowing shareholders to delay the taxable event. But you are wrong that dividends are taxed at capital gains rate. They are taxed as income.
Capital gains are taxed at capital gains rate (almost always lower) and they gain can be offset by losses. This is the main advantage of stock buyback.
- jonas21 7y agoI'm not an accountant, but I believe if the dividend comes from an American company, and you've held the stock for over 60 days, it's a qualified dividend and gets taxed at the long term capital gains rate.