Investing - Theory, News & General • 60-days dividend rule (December Purchase)

If you purchase on December 20 and sell before February 19 (61 days later), any dividends on those shares become non-qualified. If you still held the stock when you filed your taxes, and then sold the shares before February 19, you would need to file an amended tax return and correct the dividends from qualified to non-qualified.

Interesting, continuing this example, it seems we would need the price per share for the dividend to determine how much to reduce the amount of qualified dividends. Looking at my 2023 consolidated statement from Vanguard, it's not listed. Taking VTSAX as an example, it only lists the total amount of the dividend but not the price per share or the total number of shares the dividend is based on. Same with the monthly statement. Where would you find that information for tax purposes? Thanks

On the Vanguard site, the Distributions page lists the distribution per share; you can multiply this by the number of shares you held for less than 61 days.

Alternatively, you can compute the number indirectly. If you held 10,000 shares when you received the dividend, and 100 of those shares were held for less than 61 days, then 1% of the dividend becomes non-qualified.

In either case, you also need to adjust for the fraction of the dividend that was already non-qualified. If the fund paid 80% qualified dividends for the year (Vanguard has these percentages in the Tax Center) and you received a dividend of 50 cents per share, then 40 cents per share which did not meet the holding period needs to be corrected from qualified to non-qualified.

Statistics: Posted by grabiner — Fri Dec 06, 2024 9:55 am — Replies 8 — Views 1393

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