In short
Qualified dividends are dividends from US corporations (and qualified foreign corporations) that are taxed at the lower long-term capital gain rates of 0%, 15% or 20%, rather than as ordinary income.
Key takeaways
- The shareholder must hold common stock for more than 60 days in the 121-day period starting 60 days before the ex-dividend date.
- Dividends that don't qualify are taxed at ordinary rates.
- Higher-income taxpayers may also owe the 3.8% net investment income tax.
Where it's tested
REG: Individual Taxation: Gross Income — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which of the following items is included in a taxpayer's federal gross income?