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Tax rates for redemptions versus dividends after law change

What recent law change regarding dividends made the "redemption versus dividend" issue not so important anymore? How did it make it not so important anymore?

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Qualified dividend income received after 12-31-2002 has been taxed at the same rate used to calculate an individual?s capital gains tax ? at 15% maximum rate. Prior to 2003, dividend income was taxed at ordinary income rates.

There are a list of exceptions to what is qualified dividend income, including whether the income could be characterized as interest rather than a distribution of profits. ...

Solution Summary

The 245 word solution discusses a tax law that changed the approach to taking dividends as opposed to redemptions, particularly from closely-held corporations. The cited explanation lists exceptions for what is not a dividend and then states the tax rates applicable for each.