Something doesn't smell right about the accelerated dividend
I've owned SDRL for over a year and generally been very pleased with the stock. The accelerated 4rth quarter dividend, however, smells fishy. SDRL is a limited partnership and subject to the same tax scheme as MLPs. Dvidends are actually distributions which are tax deferred until sold, and then taxed at capital gains rate. Since SDRL distributions are not "qualified dividends" for purposes of current lower dividend tax rate, why bother accelerating the pay out to avoid the preseumed higher tax next year on qualified dividends? Any thoughts Board?
SDRL is not like an MLP. It pays out a dividend and I believe it is qualified, . The new SDLP formed by SDRL is like an MLP. They are paying the enhanced dividend in Dec. in case the Bush tax cuts are ended and dividends on qualified companies revert back to one's tax bracket, which will most certainly rise in that event.
"Dividends from the company [seadrill limited] are taxed at the regular 15% rate in the U.S. "
And that's the way my brokers consolidated statement treats them.
Seadrill itself calls the money paid quarterly to investors "dividends" - no distributions