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Old Republic International Corporation Message Board

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  • reitsbyziggy reitsbyziggy Aug 20, 2012 8:50 AM Flag

    Tax Status of ORI Dividend

    You have discussed tax rules but not the specific taxability of the ORI dividend. When a company has distributed all of its "earnings and profits"(a tax accounting term that is similar to retained earnings) any further dividends are considered Nondividend Distributions (aka return of capital). I checked with Charles Schwab and the ORI dividend in 2011 was considered qualified. What I am trying to figure out is when will ORI run out of earnings and profits such that the dividend will be considered a return of capital. If and when that happens you don't report the dividend as current income and instead you reduce your cost basis and report a larger gain(hopefully) when the stock is sold.

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