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Subject:  Re: Hybrid/Other Annuities Date:  4/23/2014  8:46 AM
Author:  TMFGalagan Number:  35275 of 36785

Hey Joel -

BTW, the pass-thru rule on qualified dividends is a significant reason to never to buy something like PFF (iShares S&P US Preferred Stock Index Fund) in a taxable account. This ETF pools qualified and non-qualified income and passes it all through as non-qualified dividends. A fine strategy in a tax-advantaged account, but a poor one in a taxable account.

I believe this is inaccurate. iShares provides a breakdown of qualified/nonqualified divs for use on your tax return:

For instance, here, PFF pays out almost 67% qualified dividend income, which you can claim on your tax return.

The more likely issue is that some *brokers* might not incorporate that information into their 1099s. But that's a broker issue, not an issue with the ETF structure itself.

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