Yet another qualified dividend question
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Yet another qualified dividend question
Hi everyone,
The concept of a qualified dividend is now becoming clear to me when it comes to looking at each quarterly distribution in isolation. If held for 61 days of the 121 day holding period then it counts as qualified.
The 1099-DIV form lists ordinary and qualified dividends for the entire year. How is this relevant? Doesn't one need to look at the dividends at each distribution and determine their personal qualified dividend amount based on the holding period, and then add up qualified dividends at the end of the year? If I buy shares monthly I think I'd need to pay attention to how many of my dividends are qualified for each distribution in order to accurately keep track. I don't see how a year end total can be used for dividends throughout the year without knowing the details of owned shares at the particular time of the distribution.
I'm sure I must be missing something obvious here because I have not seen anything of this sort mentioned. Most of the threads I've read deal with what counts as qualified and whether or not the 1099-DIV keeps track of your personal situation, which I now know it does not.
Thank you.
The concept of a qualified dividend is now becoming clear to me when it comes to looking at each quarterly distribution in isolation. If held for 61 days of the 121 day holding period then it counts as qualified.
The 1099-DIV form lists ordinary and qualified dividends for the entire year. How is this relevant? Doesn't one need to look at the dividends at each distribution and determine their personal qualified dividend amount based on the holding period, and then add up qualified dividends at the end of the year? If I buy shares monthly I think I'd need to pay attention to how many of my dividends are qualified for each distribution in order to accurately keep track. I don't see how a year end total can be used for dividends throughout the year without knowing the details of owned shares at the particular time of the distribution.
I'm sure I must be missing something obvious here because I have not seen anything of this sort mentioned. Most of the threads I've read deal with what counts as qualified and whether or not the 1099-DIV keeps track of your personal situation, which I now know it does not.
Thank you.
Re: Yet another qualified dividend question
OP,
It has absolutely nothing to do with when you buy. So, in your case, you do not have to do anything to adjust the number in the 1099-DIV. You only have to adjust if you sell the mutual fund/ETF after the ex-dividend date.
For example, if you buy the mutual fund/ETF right before the ex-dividend date and did not sell, you would have met the 61 days holding period requirement.
KlangFool
It has absolutely nothing to do with when you buy. So, in your case, you do not have to do anything to adjust the number in the 1099-DIV. You only have to adjust if you sell the mutual fund/ETF after the ex-dividend date.
For example, if you buy the mutual fund/ETF right before the ex-dividend date and did not sell, you would have met the 61 days holding period requirement.
KlangFool
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Re: Yet another qualified dividend question
So the holding period isn’t unique to a particular distribution? If my 61 day period is met in order to be qualified for a March distribution then it’s automatically qualified for the other quarterly distributions as well? Based on my confusion from my initial post I thought each distribution has a unique holding period in order to be qualified.
Re: Yet another qualified dividend question
Investing Newbie,Investing Newbie wrote: ↑Sun Feb 10, 2019 9:11 pmSo the holding period isn’t unique to a particular distribution? If my 61 day period is met in order to be qualified for a March distribution then it’s automatically qualified for the other quarterly distributions as well? Based on my confusion from my initial post I thought each distribution has a unique holding period in order to be qualified.
<<Based on my confusion from my initial post I thought each distribution has a unique holding period in order to be qualified.>>
Yes, that is true. But, if you never sell, how could you not meet the 61 days holding period requirement?
KlangFool
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Re: Yet another qualified dividend question
Don't worry about this. I was very confused about this item too.
An expert is someone that made the mistake and learned from the mistake before you do. We all been there.
KlangFool
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Re: Yet another qualified dividend question
So I'd like to walk through the numbers to make sure I'm doing this correctly.
Date purchased Number of shares
11/19/18 44.78
12/10/18 22.814
12/27/18 40.98
1/31/19 29.66
Ex dividend date 12/21/19
121 day window 10/22/18 - 2/19/19
Dividend .346 , 94.01% qualified (VTSAX)
Only the shares purchased on 11/19/18 and 12/10/18 are qualified since the others were purchased after the ex dividend date.
So, 67.594 shares x 0.346 x 0.9401 should equal the qualified dividends, correct?
Date purchased Number of shares
11/19/18 44.78
12/10/18 22.814
12/27/18 40.98
1/31/19 29.66
Ex dividend date 12/21/19
121 day window 10/22/18 - 2/19/19
Dividend .346 , 94.01% qualified (VTSAX)
Only the shares purchased on 11/19/18 and 12/10/18 are qualified since the others were purchased after the ex dividend date.
So, 67.594 shares x 0.346 x 0.9401 should equal the qualified dividends, correct?
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Re: Yet another qualified dividend question
Is the 1099-DIV from Vanguard not reliable in this regard?
Re: Yet another qualified dividend question
Investing Newbie,Investing Newbie wrote: ↑Mon Feb 11, 2019 10:03 pmSo I'd like to walk through the numbers to make sure I'm doing this correctly.
Date purchased Number of shares
11/19/18 44.78
12/10/18 22.814
12/27/18 40.98
1/31/19 29.66
Ex dividend date 12/21/19
121 day window 10/22/18 - 2/19/19
Dividend .346 , 94.01% qualified (VTSAX)
Only the shares purchased on 11/19/18 and 12/10/18 are qualified since the others were purchased after the ex dividend date.
So, 67.594 shares x 0.346 x 0.9401 should equal the qualified dividends, correct?
<< since the others were purchased after the ex dividend date.>>
Then, you did not receive any dividend from those lots. So, where is the problem? How could those lots cause any dividend to be non-qualified?
KlangFool
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Re: Yet another qualified dividend question
They can’t. I just like to make sure I understand how the math works.
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Re: Yet another qualified dividend question
Do you have any reason to think your 1099 DIV is incorrect?Investing Newbie wrote: ↑Mon Feb 11, 2019 10:46 pmThey can’t. I just like to make sure I understand how the math works.
Re: Yet another qualified dividend question
If you are only counting the 2 lots that purchased before ex-dividend, then, the calculation is correct.Investing Newbie wrote: ↑Mon Feb 11, 2019 10:46 pmThey can’t. I just like to make sure I understand how the math works.
KlangFool
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Re: Yet another qualified dividend question
gmaynardkrebs wrote: ↑Mon Feb 11, 2019 10:49 pmDo you have any reason to think your 1099 DIV is incorrect?Investing Newbie wrote: ↑Mon Feb 11, 2019 10:46 pmThey can’t. I just like to make sure I understand how the math works.
There has been some debate about whether or not the 1099 div accounts for ones personal holding period or not. I don’t believe that it does so I was just trying to work through the math to make sure I understand the calculations.
Re: Yet another qualified dividend question
As per your example, if you sell those 11/19/18 and 12/10/2018 lots on 1/1/2019, then, your 1099-DIV number for qualified dividend would be wrong. Those 2 lots had less than 61 days.Investing Newbie wrote: ↑Mon Feb 11, 2019 10:56 pmgmaynardkrebs wrote: ↑Mon Feb 11, 2019 10:49 pmDo you have any reason to think your 1099 DIV is incorrect?Investing Newbie wrote: ↑Mon Feb 11, 2019 10:46 pmThey can’t. I just like to make sure I understand how the math works.
There has been some debate about whether or not the 1099 div accounts for ones personal holding period or not. I don’t believe that it does so I was just trying to work through the math to make sure I understand the calculations.
KlangFool
Re: Yet another qualified dividend question
"Qualified dividends on your tax reporting statementThere has been some debate about whether or not the 1099 div accounts for ones personal holding period or not. I don’t believe that it does so I was just trying to work through the math to make sure I understand the calculations.
Qualified dividends are reported on Form 1099-DIV in line 1b or column 1b. However, not all dividends reported on those lines may have met the holding period requirement."
https://www.fidelity.com/tax-informatio ... -dividends