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Corrections Corporation of America Message Board

  • cdp58 cdp58 Nov 20, 1999 12:06 AM Flag

    Repeat question.....

    As I said earlier, I sold last 1/2 CCA/PZN
    position I held 10-13 yrs. Since the reg declared
    quarterly dividend paid since 1/99 are apparently earmarked
    as the special dividend, and Iwas a shareholder of
    record on three dividends declared (and remember I sold
    on wednesday) do I get the regular dividends that
    were declared as I was a holder of record on those
    dates? If that makes sense.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The answer is NO!

      While you are entitled
      to the three dividends that were declared while you
      owned the stock. But then you are not entitled to the
      Special Dividend that wasn't declared while you owned the
      stock and yet paid to you. So, I'm sure if you agree to
      pay back the $1.80 Special you received, PZN will
      likely pay you 3/4 of the regular dividends. Or you both
      may want to call it even and you'll come out ahead.
      :-)

    • Whether a dividend payment is designated as
      "regular" or "special" is only of consequece for tax
      purposes in meeting REIT qualifications.

      When a
      dividend is declared, only shareholders on the record date
      get it. You got the dividends that were declared when
      you owned the stock. It doesn't matter what tax
      classification they were given at the time or whether that tax
      classification is changed. If you sold your stock, the company
      no longer owes you anything. Interesting question,
      though.

      • 1 Reply to newMK
      • to the individual, from a tax basis. Especially
        in the case of the poster who has sold
        out.

        Under the old frame of reference, receiving the regular
        dividend would only be partially taxable (a percentage to
        be determined). But under this new classification
        everything recieved by investors so far will be fully
        taxable as current income, because that is the condition
        of the special.

        It is not necessarily an
        insignificant consequence. If you stick around and recieve both
        it doesn't matter, but if I were to sell out now and
        not recieve all the regulars and special for the
        year, the reclassification would cost me thousands of
        dollars in tax liability.

    • You have received all the dividends that you will
      ever receive from PZN, assuming you don't repurchase
      the stock. .55 cents each quarter of 1999 was
      declared as regular but the status has been changed to
      special. You got the amount that was declared, it just has
      a different name and the same tax
      treatment.

      You might want to contact IR or your Accountant if
      this isn't clear.

 
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