The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Fiscal cliff and dividend paying stocks||Date: 12/25/2012 3:12 PM|
|Author: brucedoe||Number: 117214 of 121095|
I might say that the dividends in REITs are not qualified so you pay your income tax at the income rate. The same goes for their preferred stocks. Yet, lots of people invest in these stocks, including myself.
There are some preferreds by financial companies, I believe, where the dividends are qualified, but these usually have a maturity date and they can skip 5 yrs of dividends. I've never bought any so I'm not really up on them.
As for corporate bonds, you get no qualified rate either nor do you on CD dividneds. I don't know of any mutual funds that give qualified dividends, but there may be some.
As Warren Buffet has said, suppose he came to you and said he had found the best investment he has seen in some time and he is going all in. Would you join him or would you first say you'd have to see what the tax rate on dividends and long-term capital gains would be?
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