Qualified Distributions for the Reduced Rate

Which dividends do not qualify for the reduced rates?

Distributions that do not qualify include:

    * Mutual funds and unit trust dividends that are not from Qualified Dividend Income.

    * Money market fund dividends that are not from Qualified Dividend Income.

    * Qualified Dividend Income from mutual funds and unit trust dividends where the fund or unit trust shareholder has not met the holding period requirement with regard to the shareholder’s fund or trust shares.

    * Synthetic preferred securities distributions.

    * Dividends on stock held in IRAs and qualified retirement plans.

    * Dividends paid on employer stock held in an ESOP.

    * Short dividends (dividends paid on stock sold short)

    * Distributions from non-equity exchange traded funds (ETFs) and unit trusts.

    * Dividends on stock not meeting the more than 60-day and 90-day holding period requirements.

    * Partnership income, except to the extent the partnership earns Qualified Dividend Income on its stock investments.

    * Dividends treated as investment income for purposes of the investment interest expense deduction.

    * Dividends from REITS unless the REIT elected to pay corporate income tax