New client has an entire portfolio full of preferred stock. He told me and his past returns prove that last year, he told the IRS they qualified for preferrential tax treatment. I can see right off the bat that there are hybrids in here (they say it in the name!) so I know they are out. My book says almost all preferred are bared from receiving preferrential treatment. Is there a way they can receive preferrential treatment?
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preferred stock dividends
My first reaction , rather gut feeling, was that only common stocks qualify for
capital gains treatment of dividends; after all, preferred stock are much higher
on the totem pole and more "guaranteed" than common.
But, look on page 20 of publication 550 and you'll see the answer.
Plus, there's a box on the 1099-div form which specifies which are or not
qualified.
ChEAr$,
Harlan Lunsford, EA in LA -
Pfd Stock
I agree with the suggestion that you depend on the 1099-DIV. What would you do if you disagreed with the 1099-DIV? You can't fight city hall.Comment
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I'll use this year's 1099. They didn't keep last years 1099's and the preparer says they will charge to give them this information because it's in files stored away.Comment
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a preparer's responsibility
is to return all original documents to client. If he did and client didn't retain them,
his fault. But to merely print out scanned copies can't take too much time, or be
worth high fees for doing so.
Of course we all know about "former" preparers! (grin
Christmas ChEAr$,
Harlan Lunsford, EA n LALast edited by ChEAr$; 12-19-2005, 06:00 PM.ChEAr$,
Harlan Lunsford, EA n LAComment
Comment