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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: DTB ✭  😊 😞
Number: of 15062 
Subject: Re: Broker recommendations?
Date: 03/28/2024 3:30 PM
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No. of Recommendations: 6
if the company pays a dividend that would normally be qualified while the shares are loaned out, the client still gets the dividend, but the dividend loses its qualified status, meaning it's taxed at a higher rate


ok, good point, I had heard that before but I had forgotten. It seems completely unfair to the client, and if it happens, the cost should surely be borne by the investor borrowing the shares, not the lender. But my understanding (perhaps mistaken) is that you lose the 'qualified dividend' status just by virtue of having your shares in a margin account, not because anyone is necessarily borrowing them. That would be a reason to avoid owning shares with a high dividend yield in a margin account, and putting them in a cash account or a tax-sheltered account instead.

dtb
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