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Your Dividend Income May Not Enjoy The Tax Break

Contributed by mm | December 5, 2003 10:40 AM PST



It is well known that according to the Jobs and Growth Tax Relief Reconciliation Act of 2003 the legislature passed back in May, most dividend income will be taxed at a lower rate of 5% or 15% depending on your income tax bracket. This Fool.com article explains that your dividend income may not qualify if your shares are held in street name and your broker lends them out for short sellers. Also, brokers' standard agreements people signed when opening an account may legally allow brokers to do so. The article mentioned you have a few ways to mitigate the risk but it's not completely under your control as I feel.

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