/kanchi-dividend-us-tax-accounting

Qualified Dividend Checklist (US)

Use this checklist for planning assumptions.

Classification Pass

For each holding, verify:

1. Distribution is potentially eligible for qualified treatment by instrument/type.
2. Shares meet required holding-period test around the ex-dividend date window.
3. No known disqualifying condition in the current fact pattern.

If any item is uncertain, mark as ASSUMPTION-REQUIRED.

Holding-Period Rules (US Federal, Common Planning Baseline)

• Common stock baseline: hold shares for more than 60 days during the 121-day period that starts 60 days before the ex-dividend date.
• Preferred stock (certain long-period dividends): often uses more than 90 days during a 181-day period starting 90 days before ex-dividend date.

Use current IRS guidance as source of truth:

• IRS Publication 550.
• IRS Form 1099-DIV instructions.

Practical Data Fields

Track these fields for each position:

• Ticker
• Account type
• Ex-dividend date
• Purchase date(s)
• Disposal date(s), if any
• Days held in required window
• Preliminary classification (qualified-likely, ordinary-likely, unknown)

Common Pitfalls

• Assuming all common-stock dividends will be qualified without holding-period verification.
• Ignoring short holding periods caused by frequent tactical trading.
• Treating REIT/BDC distributions as identical to standard qualified-dividend flows.
• Modeling special / variable dividends as steady qualified income (WS-8 hand-off from kanchi-dividend-sop). When the upstream dividend_basis carries special_dividend_flag or variable_policy_flag (e.g. ORI annual specials, CALM variable policy), treat that cash as lumpy and non-recurring for account-location and cash-flow planning: budget the regular run-rate as base income and the special/variable component separately (timing unpredictable; may still be qualified but must not be annualized as if recurring).

Recommended Source Hierarchy

1. Broker tax documents and distribution breakdowns.
2. Official IRS publications/instructions for current-year rules (Publication 550, 1099-DIV instructions).
3. Issuer or fund notices when classification is revised.