What are Dividends Anyway?

Old Blog Import

You might think exempting dividends from tax”simplifies” the income tax. Nothing could be further from the truth. What it threatens to do is open up a huge avenue for tax avoidance, insofar as income can be recharacterized as dividends.” What are dividends, after all? Well, they are whatever the law says they are. For instance, under current law interest payments and short-term capital gains from money market funds are reported as dividends.” Will they be tax-exempt as well? One never knows, do one?”

MaxSpeak Weblog

There are a lot of good posts on MaxSpeak about this issue. (Thanks to Tapped for the heads-up.)