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Annaly Capital Management, Inc. Message Board

  • bovisutor bovisutor Jul 2, 2012 7:41 PM Flag

    ACA New Dividend Tax


    High-income investors will pay a higher tax on dividends and some other investments starting next year. One of the taxes is 3.8 percent on net investment income, which is defined as income from interest, dividends, annuities, rents and income derived from passive activity or the sale of property.

    It only applies to taxpayers with adjusted gross income in excess of $250,000 (married filing jointly) or $200,000 (single).

    For the high-income investor qualified dividends are currently 15% (NLY taxed at ordinary rates). Under the ACA, the high income investor will have to pay ordinary rates (39.6 %) plus the Medicare tax of 3.8% or 43.4%.

    So if you are a NLY investor making over 200/250K, your tax increase will be 3.8%. There will be no tax increase if you make under this threshold.

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    • I am under the $250,000 threshold, but I have a big concern that my dividend investments will lose value if many who are over the threshold sell. If I was a high income investor, I just might. . .out of pique! But then where else could the money be invested? All opinions are appreciated.

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