>>What is the difference between a dividend and qualified
Dividend?  I have noticed recently in our accounting section
you now have to enter something called a ex-qualified date.
I have entered it for some, but not all.

 

Qualified dividends are a subset of ordinary dividends which "qualify" for a reduced tax rate. Qualified dividends are taxed as if they were long-term capital gains (5% or 15%) not ordinary income (10% to 35%). The accounting software can automatically determine which dividends are qualifying if, and only if, you do the following:

 

- make sure the security profile is entered correctly (common stock, mutual fund, REIT, "other", etc.)

- enter all security dividend distributions in the Security Section of the program

- enter money market fund dividends in the Cash Section of the program

- enter the ex-dividend date for all dividend distributions

 

>>When I run an income report for the year, I now have
dividens entered as "dividends" and some as "qualified
dividends."  Is there a difference and how should I enter
them into our site?

 

 

The program will determine which are qualifying. The rules are that most corporate dividends are qualifying if the underlying security was owned for more than 60 days in the 121 day window surrounding the ex-dividend date. Most REIT dividends are not qualifying. Mutual fund dividends may or may not be qualifying... the "more than 60 day" holding period rule applies both to the mutual fund's ownership of the security that paid the dividend and the club's ownership of the mutual fund shares. Money market fund dividends are never qualified. There are special rules for dividends paid by foreign companies.

>>Thanks in advance for the help.

You're welcome.

 

Ira Smilovitz