I understand the tax treatment of the distinction between ordinary income and return of capital. The question I have for the discussion board is what causes the distinction between ordinary and return of capital. In Q3 and Q4 more and more is being treated as return of capital. Does this mean that NYMT is having a hard time maintaining the same dividend payout based on earnings alone so they are returning capital to make up the difference?
BINGO!!! That is the only reason, however the new issue being done as we speak will eventually boost the price and also the earnings---by this time next year they will have no trouble meeting dividends out of earnings.