Vanguard distributions considerably higher than estimates

[jj]

As we are doing a Roth conversion this year I am keeping a close eye on distributions this December. As the first ones have come in it is interesting to see that some are considerably higher than the Vanguard estimates published at the beginning of this month. For example, VTSAX, the admiral version of total stock market, has declared 0.265 per share compared with the 0.16 estimate.

I don't remember such large discrepancies from estimates in the past. If this matters for your personal tax planning, watch out for distributions this year.

[ResNullius]

I don't know the answer, but one pure guess might be that some companies upped their dividends considerably within just the past couple weeks, some just the past couple days.

[jj]

I don't know the answer, but one pure guess might be that some companies upped their dividends considerably within just the past couple weeks, some just the past couple days.

Agreed. This is almost certainly the reason, I just wanted to alert board readers.

[flossy21]

Could it be that companies are trying to distribute higher dividends before the capital gains tax hikes in 2013?

[sscritic]

Could it be that companies are trying to distribute higher dividends before the capital gains tax hikes in 2013?

Dividends are taxed as dividends; they are not taxed as capital gains.

[ResNullius]

Could it be that companies are trying to distribute higher dividends before the capital gains tax hikes in 2013?

Dividends are taxed as dividends; they are not taxed as capital gains.

Well, actually, qualified dividends paid in 2012 are taxed at the same rate as long-term cap gains, at least for the next two weeks, which is why companies are pushing distributions into 2012. It will probably rob some of the distributions that normally would have been made next year, but who knows for sure.

[sscritic]

Dividends are taxed as dividends; they are not taxed as capital gains.

Well, actually, qualified dividends paid in 2012 are taxed at the same rate as long-term cap gains, at least for the next two weeks, which is why companies are pushing distributions into 2012. It will probably rob some of the distributions that normally would have been made next year, but who knows for sure.

But I don't know the tax law for 2013, so I don't know if dividends and capital gains will be taxed the same in 2013. So distributing dividends before a hike in the capital gains tax rate is irrelevant if the dividend tax rate isn't hiked. A is A and B is B. [I know, picky picky]