06-18-2003, 06:14 PM
I usually refrain from posting about the market since I'm int he process of getting licensed and I can't legally give advice until I pass the test but an article just crossed my desk that I thought may be of interest.
A lot of investors will NOT be eligible for Bush's dividend tax cut if they have margin accounts. In the past brokerage firms didn't distinguish between dividends and payments received in lieu of dividends on tax forms. A lot of investors aren't even aware of the difference but the latter will be charged at the old, higher tax rate. What sucks even more is that it's retroactive and you'll be taxed at that rate as of Jan 1, '03.
Hope that makes sense. If you're not sure if you have a margin acct you should find out, and if you do look into switching into an accoutn that it not affected by stock lending.
A lot of investors will NOT be eligible for Bush's dividend tax cut if they have margin accounts. In the past brokerage firms didn't distinguish between dividends and payments received in lieu of dividends on tax forms. A lot of investors aren't even aware of the difference but the latter will be charged at the old, higher tax rate. What sucks even more is that it's retroactive and you'll be taxed at that rate as of Jan 1, '03.
Hope that makes sense. If you're not sure if you have a margin acct you should find out, and if you do look into switching into an accoutn that it not affected by stock lending.
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