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Dividends Webinar Hits the Mark
Thursday, July 30, 2015
Let’s face it, webinars about calculating disallowed losses on investment portfolios deal with some pretty complex subject matter -- the U.S. tax code (wash sales, constructive sales and the like) and securities trading. Distilling that material into consumable information and reaching the right audience is no easy feat. So, when our July 15th “Tax Analysis of Dividends” webinar on Qualified Dividends (IRC § 1(h)(11)), Dividends Received Deductions (IRC § 243) and Short Dividends (IRC §263(h)) received unusually positive reviews, we were very pleased.
Quite a few attendees described the webinar as informative and helpful and within minutes after the Q&A session, even more requested copies of the webinar slides and access to the video recording. Now that we have tallied our post-webinar survey results, we have more insight into the feedback we received from our attendees -- tax managers, compliance officers, tax analysts, controllers, chief financial officers and accountants from hedge funds, hedge fund service providers and accounting & audit firms. Over 65% of our attendees reported that they hedge their positions by using a long / short or other strategy. We are pleased to know that our presentation, which explained how hedged / unhedged positions and holding period requirements affect the tax status of a dividend, hit the mark with our attendees.
During our webinar, George Michaels, an authority on TAST, used numerous examples of trading activity to illustrate when a dividend qualifies for a lower tax rate or deduction per IRC rules pertaining to dividends. Below is a sampling of some of the material about hedging that our attendees found useful.
Example: Qualified Dividend Income (QDI)
- A Taxpayer buys 100 shares of XYZ Corporation on 05/15/2009.
- XYZ produces a dividend whose ex-date is 07/09/2009.
- On 07/10/2009, the Taxpayer buys a put option (December Expiration) on XYZ that allows her to sell all her shares at a set strike price.
- The Taxpayer sells all her shares of XYZ corporation on 07/24/2009.
- The dividend fails to qualify because the Taxpayer held the shares unhedged for 56 days (05/15 to 07/10) out of the available 121 days (05/10 to 09/07).
- The days from 07/10 through 07/24, do not count because the put option diminishes the risk from holding the XYZ shares.
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