Useful Information

Disclaimer: The following information is in no way meant to be complete and there is no guarantee given or implied that it is accurate. It is solely intended to draw the reader's attention to the information for their consideration and further research.
Dividend Dates:
For cash dividends:
Declaration Date: Date the board of directors announcers that the company will pay a dividend.
Ex-dividend Date: On, or after this date, the security trades without the dividend. Buying a dividend paying stock one day before the ex-dividend gets the dividend, but buying it on the ex-dividend date means no dividend. To receive a dividend when selling, the security must be sold on or after the ex-dividend date. The ex-dividend date is the second business day before the record date.
Record Date: Date a company looks to see who owns a security.
Payment Date: Date the company pays the dividend. This is set by the company and can be anytime after the company has sufficient time to ensure accuracy of the payments and varies from company to company and dividend to dividend.
Dates for dividends payed in the form of stock may differ from the above and should be checked in each individual case by the investor.


Qualified Dividends for Income Tax Purposes:
Ordinary dividends, shown in box 1a of 1099-DIV, are taxed as ordinary income, but qualified dividends, box 1b, are taxed subject to the 5% and 15% maximum rates that apply to net capital gain. If you are in the 25% bracket the qualified dividend rate would be 15% and below the 25% bracket it would be 5%.
To qualify the following requirements must be met:
* Dividend must be paid by a U.S. corporation or a qualified foreign corporation. For information on a qualified foreign corporation see IRS Publication 550 for starters. Roughly to be qualified a foreign corporation must be incorporated in a U.S. possession or be eligible for the benefits of a comprehensive income tax treaty with the U.S., etc. or be readily tradable on an established securities market in the U.S.
* Dividends not listed on as a type that are not qualified, see Pub. 550.
* You must meet the holding period.
Holding period: Stock must be held for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. For a preferred stock, note few preferred stocks pay qualified, it is 90 days during the 181-day period beginning 90 days before the ex-dividend date. As an example if you buy a stock the day before the ex-dividend date and sell it 63 days later the dividend is a qualified dividend if it meets the other requirements.