What are Qualified Dividends / Qualified
Dividend Income?
Definition of qualified dividiends - what are qualified
dividends?
In general, “qualified dividend income” or
"qualified dividends" means dividends received from:
-
Domestic corporations, and
- Qualified foreign corporations.
Mutual funds are able to pass through dividends they receive on
their investments that are qualified dividends.
A “qualified foreign corporation” means a
corporation:
-
Incorporated in a possession of the United States, or
-
A foreign corporation in a country with which the
United States has a tax treaty (other than Barbados),
or
- A foreign corporation if its stock is readily tradable
on a U.S. stock exchange.
Readily tradable stock: Common or ordinary
stock, or an American Depository Receipt (ADR) in respect of
that stock, is considered to satisfy requirement if it is
listed on one of the following securities markets:
- The New York Stock Exchange
- NASDAQ Stock Market
- The American Stock Exchange
- The Boston Stock Exchange
- The Cincinnati Stock Exchange
- The Chicago Stock Exchange
- The Philadelphia Stock Exchange, or
- The Pacific Stock Exchange.
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