Qualified dividend
Requirements: Changed “payee” to “individual” for section consistency.
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== Requirements == |
== Requirements == |
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The dividend qualifies for the qualified rate if all the following are true: |
The dividend qualifies for the qualified-dividend rate if all the following are true: |
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* It was paid after December 31, 2002. |
* It was paid after December 31, 2002. |
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* It was paid by a U.S. corporation, by a corporation incorporated in a [[U.S. possession]], by a foreign corporation located in a country that is eligible for benefits under a U.S. tax treaty that meets certain criteria, or on a foreign corporation's stock that can be readily traded on an established U.S. [[stock market]] (e.g., an [[American depositary receipt]], or ADR). |
* It was paid by a U.S. corporation, by a corporation incorporated in a [[U.S. possession]], by a foreign corporation located in a country that is eligible for benefits under a U.S. tax treaty that meets certain criteria, or on a foreign corporation's stock that can be readily traded on an established U.S. [[stock market]] (e.g., an [[American depositary receipt]], or ADR). |
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* It meets holding-period requirements: The |
* It meets holding-period requirements: The individual must have held the stock for more than 60 days during the 121-day period that begins 60 days before the [[ex-dividend date]]. The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. For calculation purposes, the number of days of ownership includes the day of disposition but not the day of acquisition. |
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In the case of preferred stock, the |
In the case of preferred stock, the individual must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days.{{Cite web|url=https://www.irs.gov/publications/p17/ch08.html#en_US_2013_publink1000171584|title=Publication 17 (2020), Your Federal Income Tax | Internal Revenue Service}} |
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For dividends that do not meet the above criteria, the tax is determined by the date when the dividend was paid and the individual's [[ordinary income-tax bracket]]. |
For dividends that do not meet the above criteria, the tax is determined by the date when the dividend was paid and the individual's [[ordinary income-tax bracket]]. |
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