Qualified Dividend Income
What is Qualified Dividend Income?
In general, “qualified dividend income”
means dividends received from:
-
Domestic corporations, and
-
Qualified foreign corporations.
Mutual funds are able to pass through dividends they receive on
their investments that are qualified dividends.
A “qualified foreign corporation” means a
corporation:
-
Incorporated in a possession of the United States,
or
-
A foreign corporation in a country with which the
United States has a tax treaty (other than
Barbados), or
A foreign corporation if its stock is
readily tradable on a U.S. stock exchange.
Readily tradable stock:
Common or ordinary stock, or an American
Depository Receipt (ADR) in respect of that stock, is
considered to satisfy requirement (3) if it is listed on one of
the following securities markets: the New York Stock Exchange,
the NASDAQ Stock Market, the American Stock Exchange, the
Boston Stock Exchange, the Cincinnati Stock Exchange, the
Chicago Stock Exchange, the Philadelphia Stock Exchange, or the
Pacific Stock Exchange.
Qualified Dividend Income includes...
Qualified Dividend Income includes dividends
from:
-
Common stock.
-
Preferred and convertible preferred stocks, but not
synthetic preferred securities.
-
ADRs.
-
Mutual funds and unit trusts to the extent they
receive Qualified Dividend Income from investments.
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