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Financial Planning / Tax Strategies


Subject:  Re: Possible 1099 error Date:  3/11/2013  11:36 AM
Author:  Wradical Number:  118026 of 127753

The stock was bought long in August 2012 and has not been sold. The Oct dividend shows on the 1099-DIV as qualified.
OK, you didn't sell it, BUT -
You MAY have an agreement with your broker (and if you have a margin account, you probably do) whereby your broker can use the shares in your account as the shares that somebody else sells short. In that case, the short seller has to reimburse you for the dividends, but the buyer is the party who gets the qualified dividend treatment. To you, it's ordinary income.

That MAY be what happened.

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