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Dividends ought to not be at a tax disadvantage over capital gains for this reason.
by andromeduck 6y ago
Dividends ought to not be at a tax disadvantage over capital gains for this reason.
- MattGaiser 6y agoThe problem is also unrealised gains vs realised ones. I don't pay any tax on the stock price increasing. I have to pay tax on dividends. If I don't need the money, I can just let it continue to grow tax free.
- wrigby 6y agoAre they not? I thought qualified dividends (that is, dividends on stocks that have been held long enough to qualify for long-term capital gains) are taxed at the long-term capital gains rate.
- freeone3000 6y agoYou still have the one year of dividends taxed at the short-term rate, since dividends are taxed on disbursement whereas capital gains is only taxed on stock sale.
- toast0 6y agoDividends are taxable at the time of distribution; the price effects of a buyback are taxable when shares are sold [1], and delayed taxes are preferable to immediate taxes. [1] unless the holder has elected for trader tax treatment, in which case shares are marked to market at the end of the tax year