Diary of a Dividend Diva: LO, EL, CSCO, MCD
Although the fiscal cliff is likely to get "solved," the probability of tax increases is a near-certainty, so investors are bracing for the dividend tax rate to return to same level as that of "ordinary income." Most smart management teams are aware of this, and are assisting shareholders in their tax-planning by accelerating dividend payments into 2012, rather than waiting until 2013. (Keep in mind that, although you may accrue a dividend this year by owning the stock over the ex-dividend date, the tax liability actually accrues on the date the check is deposited in your account.)
Many companies are also returning cash now via large special dividends, which we discussed recently. The resulting flow of dividends is nirvana for us dividend-capture traders. I am gorging on dividends this quarter to an even greater extent than I gorged myself on turkey last Thursday!...205 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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