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In the U.S., if you've held the stock for at least one year, its dividends are taxed at a very favorable long-term capital gains rate. Stock held for less than
by winter_blue 7y ago
In the U.S., if you've held the stock for at least one year, its dividends are taxed at a very favorable long-term capital gains rate. Stock held for less than a year is however taxed like regular income.
- sokoloff 7y agoThe required holding period for qualified dividends in the US is typically 60 days, not 1 year. (It's 90 days for preferred shares.)
- jjeaff 7y agoIt's not that favorable if all the corporate cash is stored overseas in low tax holding countries. The corporation will have to repatriate the money and pay corporate income tax on it before they give you your dividends. Alternatively, they could just grow that hoard of cash and let your stock appreciate after which you can sell a few shares and get capital gains rates on capital that didn't have to be double taxed.