dividends

Linda on

Laurie,

I never said your info was inaccurate. It was other postings that were incorrect. I work in a tax office that prepares many tax returns. We use the 1099 to determine qualified dividends. That is the information that is given to the IRS and is used to match to tax returns. As a practical matter, we would never have the time to investigate every dividend to see if it satisfied the time limits to be qualified. We expect the brokerage firm to track that. Most times we would not be given enough information to determine if the broker reported the dividends correctly.

Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------

From: Laurie Frederiksen <laurie@bivio.biz>

Date:11/23/2014 5:14 PM (GMT-05:00)

To: The Club Cafe <club_cafe@bivio.com>

Cc:

Subject: Re: [club_cafe] dividends

Dear Linda,

The information which I provided was correct. You will also find it in the IRS description of qualified dividends which you will find here:

Qualified Dividends

It is not true that if a broker shows a dividend as qualified on a 1099 that it meets all the tests to be considered qualified. As I indicated, if brokers find it "impractical" to run the holding period check, they do not have to use it to determine what they report as qualified. In our experience most of them don't run that check.

Here is the wording from the 1099-DIV instructions that lets them report the way they do:

"Enter the portion of the dividends in box 1a that qualify for the reduced capital gains rates. Include dividends for which it is impractical to determine if the section 1(h)(11)(B)(iii) holding period requirement has been met."

That doesn't mean, however that you don't have to run this check to report the dividend amounts correctly. That is part of the service that bivio provides for your club.

Laurie Frederiksen
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Laurie Frederiksen on

Dear Linda,

Your tax service may be playing the odds that taxes won't be questioned, but that doesn't mean that it is correct to report dividends as qualified that do not meet the holding period requirement.

Our software provides the ability to easily do this check so that investment clubs can feel comfortable this will not be a problem.

On Sun, Nov 23, 2014 at 10:44 PM, Linda <wiltse@optonline.net> wrote:

Laurie,
I never said your info was inaccurate. It was other postings that were incorrect. I work in a tax office that prepares many tax returns. We use the 1099 to determine qualified dividends. That is the information that is given to the IRS and is used to match to tax returns. As a practical matter, we would never have the time to investigate every dividend to see if it satisfied the time limits to be qualified. We expect the brokerage firm to track that. Most times we would not be given enough information to determine if the broker reported the dividends correctly.
Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

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