How To Lower Your Tax Bill On REITs or Master Limited Partnerships (MLPs), investors are sometimes surprised by the hefty tax bill in REITs and MLPs are taxed at ordinary income tax rates if they are in taxable accounts to takes a big bite out of the total return for many for a way to get around this tax bill if an investor has capital losses he can use to call this strategy dividends to capital gains conversion.
A idea is this to taking dividends in the form of capital gains and then offsetting those gains with capital losses you may have you can pay an effective tax rate of 0% in compare this to paying either the 15% rate for qualified dividends for most people or your top marginal income tax rate on REIT investments and MLPs.
So how does one go about converting dividends to capital gains? It takes some monitoring, but it could very well be worth your time to 1st let's define the ex-dividend date for a stock in the ex-dividend date is the day on which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend is an important date for any company that has many stockholders, including those that trade on exchanges, as it makes reconciliation of who is to be paid the dividend easier is just as important for investors you to must own a stock before the ex-dividend date in order to receive the next scheduled dividend.
A idea is this to taking dividends in the form of capital gains and then offsetting those gains with capital losses you may have you can pay an effective tax rate of 0% in compare this to paying either the 15% rate for qualified dividends for most people or your top marginal income tax rate on REIT investments and MLPs.
So how does one go about converting dividends to capital gains? It takes some monitoring, but it could very well be worth your time to 1st let's define the ex-dividend date for a stock in the ex-dividend date is the day on which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend is an important date for any company that has many stockholders, including those that trade on exchanges, as it makes reconciliation of who is to be paid the dividend easier is just as important for investors you to must own a stock before the ex-dividend date in order to receive the next scheduled dividend.
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