Thursday, January 09, 2003

Anyway, the whole dividend tax cut thing is a bit more complicated than we were first lead to believe.

Time for the real tax accountants/lawyers to step in here. But, it looks as if dividends are tax free only to the extent that a company pays federal taxes. As in, pay $100 million in taxes and you can pay $100 million in dividends. Also, there's this deemed dividend thing which means that any amount pay as corporate taxes can be reinvested instead of paying paid out, but then the basis by which the capital gain on the stock would be later calculated is adjusted upwards...too confusing for me.