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Market Vectors Biotech ETF Message Board

  • planocricket planocricket Jun 16, 2009 4:00 PM Flag

    Tax status of the large BBH distribution in May

    What did your broker report the distribution as ? My broker reported it as a 'ordinary dividend' . Which sucks as that means the whole distribution gets taxed as ordinary income. Which is far from truth. This distribution should be labeled as 'return of capital' which is what it is. And so adjust your cost basis when reporting a gain or loss when you sell your BBH shares. The way my broker reported, the distribution which is 50% of the value of holding becomes dividend income (which is taxed as ordinary wage income) and then you take a capital loss of the same magnitude which only applies against your capital gains in other stocks (which no body has right now).

    All owners of BBH stock should call the stupid morons at merryl Lynch (who manages the BBH holders) so they report this distribution correclty (as return of capital. i.e. no tax event except to reducte your cost basis).
    Plano

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    • Fidelity reported the distribution under Long Term Gain with an 'Unknown' Date Acquired and 'Unknown' cost basis. Have been trying to find out if it should be reported as partial return of capital (which would makes sense) or all LT gain (I've held BBH for well over a year), but ML is uncooperative since my account isn't at their firm. Not sure what I'm going to do... LOL!

    • I just got my 1099 from Vanguard. In that statement Biotech Holders reports a sale on April 29th. It does not specify if this is short or long term. It does not provide any cost basis. I am guessing that one would use cost basis of zero for a long term gain. I could not find any information at the Biotech Holders web site concerning cost basis for this event.

      'What did your broker report the distribution as ? My broker reported it as a 'ordinary dividend' . Which sucks as that means the whole distribution gets taxed as ordinary income. Which is far from truth. This distribution should be labeled as 'return of capital' which is what it is. And so adjust your cost basis when reporting a gain or loss when you sell your BBH shares. The way my broker reported, the distribution which is 50% of the value of holding becomes dividend income (which is taxed as ordinary wage income) and then you take a capital loss of the same magnitude which only applies against your capital gains in other stocks (which no body has right now).

      All owners of BBH stock should call the stupid morons at merryl Lynch (who manages the BBH holders) so they report this distribution correclty (as return of capital. i.e. no tax event except to reducte your cost basis).'
      Plano

 
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