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Financial Planning / Tax Strategies
|Subject: Re: Transferring stocks to a charity after ex di||Date: 1/3/2014 4:42 PM|
|Author: katinga||Number: 119790 of 121351|
The date of record came after the ex dividend date in this case. The ex date was the 12th, the gift transfer was the 13th, and the record date was the 16th. The charity indeed gets the dividend.
http://www.investopedia.com/articles/02/110802.asp has this to say (courtesy of my Schwab account adviser):
Ex-date or Ex-dividend date - On (or after) this date the security trades without its dividend. If you buy a dividend paying stock one day before the ex-dividend you will still get the dividend, but if you buy on the ex-dividend date, you won't get the dividend. Conversely, if you want to sell a stock and still receive a dividend that has been declared you need to sell on (or after) the ex-dividend day. The ex-date is the second business day before the date of record.
Date of record - This is the date on which the company looks at its records to see who the shareholders of the company are. An investor must be listed as a holder of record to ensure the right of a dividend payout.
Date of payment (payable date) - This is the date the company mails out the dividend to the holder of record. This date is generally a week or more after the date of record so that the company has sufficient time to ensure that it accurately pays all those who are entitled.
So the charity gets the dividend, and there is no tax deduction for the loss of the dividend. And since stocks generally lose the value of the dividend in price on the ex div date, there's a small loss on that score, too.
Not complaining, lesson learned, but people should keep this in mind when giving a moderate to high yielder as a stock gift.
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