After reading the results of Q4, I noted that the taxable income per share was $6.87 vs dividend distribution of $5.00. On a 1000 shares, does that mean we need to report $6870 of ordinary income to IRS, even though dist. was only $5000? (Assuming not in an IRA, etc).
Just pretend like you know nothing about taxes, which seems to be the case, and hand the end of the year report that you get from your broker to your tax accountant and let him figure it out. TD Ameritrade has a calculator for figuring out your investment gains / losses for the tax year in question. That along with the dividend income is all you need. Keep in mind that mREIT dividends are taxed as income unlike other dividends. That is because they are not double taxed. The reason regular dividends are taxed at a lower rate is because they are double taxed. But don’t try and explain that to Obama. He just sees the dividend tax rate and imagines that someone is getting a bargain, which they aren’t as the dividend has already been reduced by the amount of taxes that the company paid, unless you are GE. But then he’s not the sharpest tool in the shed so I expect no better. In fact, I would have been surprised otherwise. You are still getting a better deal with mREIT tax rates since the US pays some of the highest corporate taxes in the world. Add the corporate tax rate to the normal 15% dividend tax rate and you are above the maximum tax rate for personal income. The conclusion being is that mREIT tax rates are a better deal than regular dividend tax rates and that is mainly because those regular dividend payouts are lower because of those corporate taxes they have to pay.
Stocks are not like mutual funds. You only pay taxes on dividends and capital gains which you incur when you sell the stock. So forget about anything else you read. As an individual investor instocks it does not concern you.
This is why I do not hold mutual funds outside an IRA account. And I don't hold dividend paying stocks, except for mREITs, in an IRA account if the dividend is more than a few percent because I don't want to pay personal income tax rates on something that has already been taxed once. That would be a killer.
no, you will only report the divd recieved ( to include the one recieved in Jan 2013 but less the one recieved in Jan 2012). it will be split between Cap gains on Scd D & divd income on sch A. You will recieve a 1099 providing the break out