I have pretty much written off a resolution of the fiscal cliff by the end of the year. I’m 70% cash and plan on picking up some bargains after the first of the year. My immediate concern is how this will affect the divvy run on AGNC this time – thoughts anyone?
Dividend payments made out by the REIT are taxed to the unitholder as ordinary income - unless they are considered to be "qualified dividends", which are taxed as capital gains. Otherwise, the dividend will be taxed at the unitholder's top marginal tax rate.
The proposed dividend tax increase would not have the same effect on REITs as it does to other dividend payers. The actual tax bracket that you fall under might change, however. (Please correct me if I am wrong).
Everything you said is correct. Whether Joe Public understands what you said is the question. Panic selling, is panic selling, where facts fly out the window, until the bottom rung is reached, as we just experienced on Nov 7th-15th....great opportunities are born at these moments...