Question for all you BKE enthusiasts...So as long as I buy sometime before the close on Oct. 15th, I receive the 1.80/dividend and the .20 quarterly dividend? Is there an amount of time I need to hold for?
ex-date is the 13th. meaning trading EXCLUDING the dividend. This is not free money. Div is 1.80 so on Oct 13th the stock will trade lower and you will have a taxable event on your 2009 taxes. You will have to buy the stock no later than October 12th. You can sell it the next day if you want. Traders call that buying the dividend. The IRS calls it easy money. Do not buy this stock for the dividend. Buy it because you think it is going higher.
Do you mean you will be taxed on the dividend, and the stock loses value also? So, that can be a negative reason to not buy the stock? I'm trying to understand exactly. It's seems a bit like not wanting to hit the lottery, because you'll have to pay taxes on it. Do you think in your estimation, that the stock would go down as much as $1.80 after the ex dividend date? Thanks
In Barrons this week they state that in order to receive the 15% tax treatment you need to hold the stock for more than 60 days in the 121 day period that begins 60 days before the ex date of 10/13.. they also state something about being able to have the short term capital gain (35%) converted into qualified dividend income taxed at 15%. any thoughts, especially on how to convert the gain to dividend status.
No, that is incorrect.
The "ex-dividend" date is October 13th. "Ex-dividend" means WITHOUT dividend. In short, the first day that the stock trades with the dividend removed is October 13th.
You have to own the stock no later than October 12th to be entitled to receive the dividend.
Go to the Yahoo Statistics page. On the right side column you'll find the ex-dividend date listed when a dividend has been declared. Many brokerages, such as Schwab, also show it in their "Detail" page on a stock.
Hope this helps...
And no, you don't have to hold the stock for any particular length of time.
You can buy the stock on the 12th, in order to be entitled to the dividend, and then sell it on the 13th -- if you're in a margin account.
If you're in a cash account, like an IRA or Roth IRA, or any non-margin account, you'll have to wait three days for the trade to settle, and then you can sell it.
You don't have to hang on to it until the dividend is paid. The dividend goes to whoever owned the stock on October 12th -- because the price that person paid for the stock INCLUDED the cost of the dividend, which was then taken out of the share price the next day.