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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13314
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have 360k income from dividends. I've held the stock

Customer Question

Hi, I have 360k income from dividends. I've held the stock for 2 years. What is my tax rate on the income? I also receive 290k from rental properties from an estate.
I always thought I should think of the 360k as ordinary income. So putting me in the highest tax bracket.
Submitted: 5 months ago.
Category: Tax
Expert:  Robin D. replied 5 months ago.

Hello

The tax rate on the dividends will depend on your overall income and whether the dividends are Qualified.

Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. They should be shown in box 1b of the Form 1099-DIV you receive.

The maximum rate of tax on qualified dividends is:

  • 0% on any amount that otherwise would be taxed at a 10% or 15% rate.

  • 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39.6%.

  • 20% on any amount that otherwise would be taxed at a 39.6% rate.

If qualified then they are not ordinary income.