I have read previous post on the subject of qualified vs
non-qualified dividends. Our brokerage classifies XLF as
having paid both qualified and non-qualified dividends where
bivio classifies them as all qualified. The problem is, I
can't seem to edit the bivo entry to a regular dividend.
It returns the entry to qualified each time. Am I doing it
wrong ?

Roy Williams

On 2/5/08, Roy Williams wrote:
> I have read previous post on the subject of qualified vs
> non-qualified dividends. Our brokerage classifies XLF as
> having paid both qualified and non-qualified dividends where
> bivio classifies them as all qualified. The problem is, I
> can't seem to edit the bivo entry to a regular dividend.
> It returns the entry to qualified each time. Am I doing it
> wrong ?

There are four qualifiers: the stock, the dividend, the holding
period, and margin accounts. XLF is a qualifying stock. The
dividend only qualifies if you hold it for long enough. If the stock
was loaned out at the time you received the dividend, it's not
qualifying. This only happens on margin accounts as far as
I know.

The holding period is the tricky bit. Did you hold the stock
for 60 days before and after the ex-dividend date?

Cheers,
Rob

Rob Nagler wrote:
> On 2/5/08, Roy Williams wrote:
> > I have read previous post on the subject of qualified vs
> > non-qualified dividends. Our brokerage classifies XLF as
> > having paid both qualified and non-qualified dividends where
> > bivio classifies them as all qualified. The problem is, I
> > can't seem to edit the bivo entry to a regular dividend.
> > It returns the entry to qualified each time. Am I doing it
> > wrong ?
>
> There are four qualifiers: the stock, the dividend, the holding
> period, and margin accounts. XLF is a qualifying stock. The
> dividend only qualifies if you hold it for long enough. If the stock
> was loaned out at the time you received the dividend, it's not
> qualifying. This only happens on margin accounts as far as
> I know.
>
> The holding period is the tricky bit. Did you hold the stock
> for 60 days before and after the ex-dividend date?
>
> Cheers,
> Rob

Rob,
Thanks for the prompt response. We have met all holding
period requirements for a qualified dividend. It is not a
margin account. Since XLF is an ETF, I understand that they
also have to meet the holding period on each of their
investments. This may be why they report some of the
dividends as non-qualified.

Our broker says they report the dividends as instructed by
XLF.

What I would like to learn is how to edit the bivio dividend
classification on this holdimg. Each time I try, bivio
returns the entry to all qualified dividends.

Thanks
Roy WIlliams

> XLF is a qualifying stock.

XLF is an EFT, not a stock. It does not pay "dividends", it
pays "income dividend distributions", which are not
necessarily all "qualified" dividends.
http://www.sectorspdr.com/spdr/distributions/?symbol=XLF

The following is quoted from from
http://seekingalpha.com/article/17023-do-your-etf-dividends-qualify-for-the-15-rule

"It’s easy for investors who held their dividend paying
equity ETF the requisite period to mistakenly assume their
distributions qualify for the favorable tax treatment.
Caveat Emptor! The rules apply to each individual holding of
the fund, and of course the fund’s tax liability is passed
through to you. In order for you to get favorable tax
treatment, the shares of stock must be held by the fund
according to the stated rules, have been distributed to you
AND you had to hold the shares of the fund for at least 61
days out of the 121 day period that began 60 days before the
fund’s ex-dividend date. Confused yet?"

How do you handle this in club accounting? I imagine you'll
have to go back and individually edit each "income dividend
distributions" to separate them all into qualified and
non-qualified parts. Perhaps it would be sufficient to
split up each distribution during the year based on the
overall ratio of qualified vs. non-qualified for the entire
year.

This seems like the sort of end-of-year accounting headache,
in a somewhat less complicated form, that causes some to
recommend that clubs avoid investing in REITs.

-Jim Thomas

Jim Thomas wrote:
> > XLF is a qualifying stock.
>
> XLF is an EFT, not a stock. It does not pay "dividends", it
> pays "income dividend distributions", which are not
> necessarily all "qualified" dividends.
> http://www.sectorspdr.com/spdr/distributions/?symbol=XLF
>
> The following is quoted from from
> http://seekingalpha.com/article/17023-do-your-etf-dividends-qualify-for-the-15-rule
>
> "It’s easy for investors who held their dividend paying
> equity ETF the requisite period to mistakenly assume their
> distributions qualify for the favorable tax treatment.
> Caveat Emptor! The rules apply to each individual holding of
> the fund, and of course the fund’s tax liability is passed
> through to you. In order for you to get favorable tax
> treatment, the shares of stock must be held by the fund
> according to the stated rules, have been distributed to you
> AND you had to hold the shares of the fund for at least 61
> days out of the 121 day period that began 60 days before the
> fund’s ex-dividend date. Confused yet?"
>
> How do you handle this in club accounting? I imagine you'll
> have to go back and individually edit each "income dividend
> distributions" to separate them all into qualified and
> non-qualified parts. Perhaps it would be sufficient to
> split up each distribution during the year based on the
> overall ratio of qualified vs. non-qualified for the entire
> year.
>
> This seems like the sort of end-of-year accounting headache,
> in a somewhat less complicated form, that causes some to
> recommend that clubs avoid investing in REITs.
>
> -Jim Thomas


Jim,

I agree with your assessment of the distributions from the
XLF ETF. The problem I have is, bivio does not let me
"edit" the dividend classification or I am doing it wrong.
Any one know how to edit the dividend classification.
Each time I try to split it into qualified and non-qualified
dividends, it returns to the qualified dividend
classification.
Thanks
Roy Williams