Saturday November 29, 2014

Companies accelerating special dividends

Companies are paying special dividends at a pace four times higher than last year.

“Companies from Wynn Resorts to IDT are paying special dividends at four times the pace of last year,” reports, “helping investors stay a step ahead of the taxman with rates poised to jump in 2013.” From the end of this year’s third quarter to the middle of this month, a total of 59 companies in the Russell 3000 stock index declared a one-time cash payment to shareholders — an increase from about 15 in the year-ago period. “More than a dozen said they acted because of a pending dividend-tax increase,” NorthJersey notes. “Congress is poised to let the rate on dividends, which was lowered to 15 percent during the George W. Bush administration, increase after President Barack Obama won a second term on a pledge to exact more revenue from top earners.” The dividend tax will revert to the ordinary income rate, which tops out at 39.6 percent, if Capitol Hill lawmakers take no action.

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