pdooma
Lv 7
pdooma asked in Politics & GovernmentPolitics · 7 years ago

Have you sold your dividend stocks, or are you preparing to do so?

Since the tripling of dividend taxes will pretty much make most of those stocks not a money earner any more.

Do you think the tax increase will impact the thousands of Seniors who rely on dividend payments to fund their retirements?

Update:

You're right - they're not going from 15% to 45%, only up to 39.5%.

http://www.bloomberg.com/news/2012-11-19/special-d...

Update 2:

Sigh.

The companies will pay out the special dividends now while the rates are low. And then will put out much smaller dividends paid at a much higher rate later. The income they once provided will 1. not be paid and 2. be paid at a higher tax rate. Either way, not worth owning as a dividend income stock.

Update 3:

Oh I think it's hilarious. I don't think people understand how dividend stocks work and why they're used as income for many people instead of as a traditional 'stock'.

Update 4:

There are better investments to be made with that money that pay you more. So feel free to hold on to those stocks.

16 Answers

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  • 7 years ago
    Best Answer

    Actually, they can go up to almost 44% "Add the 3.8% and the tax on dividends will nearly triple to 43.4% for the highest earners."

    Time to sell now - don't wait for 2013.

    EDIT: Scary how many people are yelling for you to have a calculator, and have no idea what they're talking about.

  • Linda
    Lv 4
    4 years ago

    There is no specified/legal amount of time you must own a stock before you are able to capture the dividend. When a company declares a dividend, the board of directors decided how much it will pay and on what day it is payable. They also declare a "record date". Anyone who owns the stock within 2 days after that record date (called the ex-date) is eligible to receive the dividend. If a company determined that the record date was March 1, as long as you owned it by March 3, you would recieve it. But, be aware that when a company pays a dividend, all else equal, the price of the shares goes down by that amount on the ex-date (because the company no longer has the cash on its balance sheet and is now worth less). So, trying to time the dividend can result in tax consequences and little financial gain. Good luck!

  • 7 years ago

    Can't because in California that will generate 25% federal and 10% state cap gains taxes even now. That will be at least 34% in seven weeks. But expect a massive sell-off and dropping stock market through December because the business community has been branded as criminals by this administration.

  • Anonymous
    7 years ago

    Wait you won't own a stock because the dividend payment isn't as high as last time? But it's still paying out. You're f*cking stupid.

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  • 7 years ago

    Tripling of dividend stocks? Not really. If nothing is done they will go from the present 15% to 39%. But I'll bet you as part of the new tax cuts structure the capital gains tax might go up from 15% but more likely to maybe 20% or 25% tops.

  • joe714
    Lv 7
    7 years ago

    and less than 1% interest on savings doesn't help either.

  • 7 years ago

    Unless you've heard something I haven't, the most they could go up to is the same rates for earned income, which is only double the current tax. So according to your question, it would be better to sell those stocks in order to avoid paying income tax rates and not have the income to begin with. Is that right?

    Not only is that silly, it also opens you up to capital gains on the whole amount.

  • Anonymous
    7 years ago

    Current dividend rate: 15%.

    Maximum rate--absolute maximum--after fiscal cliff: 39.6%.

    Grab a calculator, genius. Either that or look up the word "tripling."

  • GARF
    Lv 6
    7 years ago

    My plan is to sell all dividend paying stock and reinvest in growth non U.S. companies. For those investments I will hold onto them since I do not need the income until tax rates are more favorable. Additionally, if estate tax exemptions are lowered, I am moving to British Columbia.

  • 7 years ago

    Dividends are taxed at 15%. And there is NO way that tax is going to go up to 45%.

    ADDED:

    Ah, I see your problem....ignorance. You don't know the difference between "Ordinary Dividends" and "Special Dividends".

  • Anonymous
    7 years ago

    No.

    I have mutual funds, and they pay out gain distributions in December. I'm waiting for that.

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