When we go over the cliff does dividend income revert to being taxed as regular income?

[cthulu2016]

If so (I think it might) this would be the most dramatic cliff adjustment in terms of magnitude of increase, literally more than doubling the tax on dividend income. (And reducing the value of dividend yielding stocks but at least that amount.)

Anyone know if that is the case?

[PoliticAverse]

1. Yes it is the case that it will be taxed as ordinary income absent a deal.

See: http://articles.marketwatch.com/2012-09-05/investing/33583881_1_dividend-taxes-dividend-stocks-dividend-payers

Also there's a 3.8% tax imposed on unearned income as part of the PPACA (aka Obamacare) that starts in the new year.

[cthulu2016]

2. Thanks. (and the market is right to sell-off somewhat)

There is a tax policy subsidy built into all dividend yielding stocks that is part of the stock's value.

And a cap gains increase to pre-Bush levels affects all stock sales after the 1st also... so yeah, the time to sell is now.

Thanks to the "pro-business" party.

[PoliticAverse]

4. There's also a 3.8% unearned income surcharge that was part of the PPACA that starts in Jan,

and is the reason several companies have pushed dividend payments into the current tax year.

[LonePirate]

3. Disregard.

[cthulu2016]

5. I beleve that 20% level was a proposed deal

rather than what happenes when we go over the "cliff"

[PoliticAverse]

6. It should be pointed out though, that tax rates can be changed retroactively...

so even if the rates revert January 1st this can be changed even months later.

[cthulu2016]

8. True

[closeupready]

7. K&R