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Okay, that makes sense. That's still a pretty big hit for me, but less than capital gains. I've got some losses that would probably offset it a bit too.

I sense some lingering confusion. Ordinary income tax rates are never less than the rate on capital gains. Also, capital losses do not directly offset dividend income. For example, you could have dividends of $20,000 and net capital losses of $20,000, and you could only offset $3,000 of the dividend income with captial losses, leaving a net of $17,000 taxable income.

I think you should do some reading in the Investment Issues section of the FAQ.

Phil Marti
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