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AvatarJoeCPA
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Post count: 74

Bekka, I agree with Sean in two ways. First, consult your tax advisor for tax questions and/or concerns you might have as to your particular tax situation. Second, income is income and even after paying taxes on the income you end up with more money than you would if you had not earned it. With that said, after buying and reading Sean’s Dividend Capturing Strategy, because of the short term nature of the buying and holding prior to selling of the dividend paying stocks, chances are that one will incur short term capital gains and hopefully end up with a “net short term capital gain”. The good news is that it’s a net gain. The not so good news is that net short term capital gains are taxed as “ordinary income” – higher rate than net long term capital gains. The same goes for the dividends. Because of the short holding period for the stock, chances are that any dividend income earned will not be “qualified dividend” income which is subject to a more favorable tax rate than ordinary income. Instead, chances are the dividend income is not going to be “qualified dividend” income and be subject to the ordinary income tax rate. If your head is about to explode, call your tax advisor. I hope you make a ton of income regardless of its classification for tax purposes!