Do synthetic preferred securities pay
Qualified Dividends?
About synthetic preferred securities
No. Although synthetic preferred securities
(QUIDS, QUIPS, SATURNS, TOPRS, MIPS, etc.) trade the same as
equities, they are considered debt securities and pay
“interest” for tax purposes. Therefore, the “interest” is not
Qualified Dividends.
Do REITs pay Qualified Dividend Income or qualified
dividends?
Real estate investment trust (REITs)
distributions can qualify for the lower dividend tax rate.
However, since REITs must invest primarily in real estate
assets (rather than qualifying corporate stock), it is unlikely
that a significant portion of REITs distributions will qualify
for the lower rates. Check with the REITs directly for specific
information regarding qualified dividends distributions.
Can Qualified Dividends be used to offset
capital losses?
No. Under the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (JGTRRA 2003), Qualified Dividends
Income or qualified dividends can not be used to offset
capital losses. Only $3,000 of ordinary income can be offset by
capital losses.
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