- Dividend University
- DIV 401
Taxes for Income Investors
Two investments with the same yield can leave you very different amounts after tax. This course explains how US investors are taxed on dividends and fund distributions: qualified and ordinary dividends, return of capital and your cost basis, the 60/40 rule for Section 1256 funds, covered call premium, REIT and MLP payouts, foreign withholding, and which account each holding belongs in.
- Tell qualified from ordinary dividends and know the holding period rule
- Read every box on a 1099-DIV that matters to an income investor
- Track how return of capital lowers your cost basis
- Explain the Section 1256 60/40 rule and why some option income ETFs use it
- Place each kind of holding in the account where it is taxed least
Syllabus
- 111 min
How Dividends Are Taxed
Qualified, ordinary, return of capital: why two $100 dividends can leave you different amounts.
- 210 min
Reading Your 1099-DIV
The tax form every dividend investor gets each February, one box at a time.
- 311 min
How Return of Capital Is Taxed
Not taxed now, taxed later: how return of capital quietly lowers your cost basis.
- 411 min
Section 1256 and the 60/40 Rule
Why some option income funds sell index options, and how the 60/40 rule cuts the tax bill.
- 511 min
How Covered Calls Are Taxed
Premium, assignment and the holding period traps that can turn qualified dividends ordinary.
- 610 min
How REIT, BDC and MLP Payouts Are Taxed
The high yielders with their own tax rules: REITs, BDCs and the K-1 issuing MLPs.
- 78 min
Foreign Dividends and Withholding Tax
Why foreign dividends arrive smaller, and how to claim some of it back.
- 89 min
Which Account Should Hold Your Dividends?
Same investment, different account, very different tax bill. Asset location explained.
- 99 min
Tax-Loss Harvesting for Dividend Investors
Turning a losing position into a tax break without giving up your income.