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hjtheuns

hjtheuns
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  • Kraft Foods, H.J. Heinz Merger To Drive Significant Potential Synergy And Dividend Growth Opportunities [View article]
    I have not seen anything that specifically states the tax consequences of the merger or the special dividend. I do know that the merger can be structured as a tax-free reorganization and almost assuredly will be. I also believe the special dividend will not be considered a qualified dividend because it will be considered "extraordinary" because of its size and is not from earnings, but from capital inserted by Berkshire Hathaway and 3G.
    Mar 25, 2015. 01:00 PM | Likes Like |Link to Comment
  • Kraft Foods, H.J. Heinz Merger To Drive Significant Potential Synergy And Dividend Growth Opportunities [View article]
    Kraft Heinz will structure the transaction as a tax-free reorganization. The $16.50 special dividend will not be taxed as a qualified dividend.
    Mar 25, 2015. 12:27 PM | 1 Like Like |Link to Comment
  • Kraft, Heinz announce merger [View news story]
    The taxes on the KRFT special dividend could be complicated. I believe it will be considered return of capital and an extraordinary dividend (more than 10% of the value of the stock at the time of the distribution) under the tax code. This will change cost basis and it will not be taxed at qualified dividend tax rates.

    Not too worried about the taxes, this is a good deal for KRFT shareholders but the taxes will be more complicated than normal.
    Mar 25, 2015. 09:56 AM | 1 Like Like |Link to Comment
  • Kraft Foods, H.J. Heinz Merger To Drive Significant Potential Synergy And Dividend Growth Opportunities [View article]
    Does anyone know how the KRFT special dividend will be taxed? I'm unclear if it will be considered return of capital and the tax consequences of it being an extraordinary dividend (more than 10% of the value of the stock at the time of the distribution) under the tax code.
    Mar 25, 2015. 09:25 AM | 2 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    I agree that EMR is currently an attractive investment. I added to my position recently at $56. EMR has oil exposure which is impacting current earnings and near term projections. If oil drops further EMR will likely follow. If that happens I would be buying aggressively.
    Mar 20, 2015. 03:53 PM | 1 Like Like |Link to Comment
  • Dividend Contenders: 26 Increases Expected In The Next 11 Weeks [View article]
    RTN has been reliable and has a fantastic record over the past 10 years. Over that period the annual dividend per share growth rate has been 11.7%, the annual earnings per share growth rate has been 23.8% and has given investors an annualized return of 14.8%!
    Mar 18, 2015. 08:26 PM | 2 Likes Like |Link to Comment
  • Dividend Contenders: 26 Increases Expected In The Next 11 Weeks [View article]
    Aaron – The main idea of asset location is to divide investments among taxable and retirement accounts in a way that will ultimately provide the best after-tax returns. Retirement accounts are divided between those with front-end loaded tax benefits (IRA) and back-end loaded tax benefits (Roth IRA). So when an investor considers which type of retirement account an asset should be held in, he is weighing many factors such as his current tax situation against an anticipated future tax situation into the decision. In practice this means applying time value of money calculations into the decision process. The traditional IRA and the Roth IRA have the same tax implications during the holding period but have different tax implications before and after. The way I look at is that you have a silent investment partner, the IRS, in a traditional IRA. The IRS is going to take your income tax rate when you withdrawal. This will have a dramatic impact on your after-tax return and needs to be considered in your asset location decision.
    Mar 18, 2015. 01:09 PM | 1 Like Like |Link to Comment
  • Dividend Contenders: 26 Increases Expected In The Next 11 Weeks [View article]
    Aaron – You have asked a great question to which there is no simple answer. As with a lot of things, the answer is that it depends. Searches for Asset Location and After Tax Asset Allocation will provide numerous articles about specific considerations. You will find that the answer may differ depending on whether the IRA is a traditional IRA or a Roth IRA. My opinion is that Nestle, and dividend growth stocks in general are better to be held in a taxable account because:

    Foreign taxes can be deducted
    To take advantage of the lower qualified dividend tax rate
    To take advantage of tax loss harvesting
    The potential for a stepped-up cost basis for heirs

    These factors need to be weighed against how actively you intend to trade, what other assets you have, if you typically maximize contributions to your IRA and have additional funds to invest and what you expect your tax rate to be when you are withdrawing funds.

    Best of luck finding your answer to a question that most investors should spend much more time thinking about.
    Mar 16, 2015. 06:24 AM | 1 Like Like |Link to Comment
  • Dividend Contenders: 26 Increases Expected In The Next 11 Weeks [View article]
    TJX has announced their intention to raise their dividend 20%, from $0.70 to $0.84. I expect the official declaration on April 7.
    Mar 15, 2015. 08:28 PM | 1 Like Like |Link to Comment
  • Dividend Champions: 15 Increases Expected By The End Of May [View article]
    David - CLX should also be announcing a dividend increase before the end of May. In the past it has been on the second Monday in May. So, I anticipate this year's increase will be declared on March 11th.
    Mar 15, 2015. 04:03 PM | 2 Likes Like |Link to Comment
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    Mike - Your point is well-taken. Taking it one step further I would say that most investors are unfamiliar with the idea that the same asset held in different types of accounts have different after-tax risk profiles and hence have different after-tax values. If they are cognizant of tax strategies at all they are focused on capital gain efficiencies and to a lesser degree estate planning issues. Very few pay any attention to the equally important but more underlying issues, such as how taxes affect risk and effective after-tax asset allocation and location decisions.
    Mar 15, 2015. 01:48 PM | 2 Likes Like |Link to Comment
  • Dividend Challengers (And Near-Challengers): 51 Increases Expected By May 30 [View article]
    David - Thanks for all you effort. Your CCC spreadsheet is a great resource.

    BBT looks attractive at current valuation as seen in the FAST Graph. They announced their intention to raise the dividend 12.5% (from $0.96 to $1.08) last week. It will become official the end of April.
    Mar 15, 2015. 07:13 AM | 3 Likes Like |Link to Comment
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    munibill – You have missed the essence of the consideration of recovering capital gains tax. It is part of a reasoned decision to switch from one investment to another. Paying taxes, along with transaction fees and inflation, reduces gains. Of these three, we can have some influence on two. Inflation is outside of our control. So, the factors to concentrate on are tax efficiency and investment expenses.
    Mar 15, 2015. 07:01 AM | 2 Likes Like |Link to Comment
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    Regarded Solutions - Hopefully, it is a educated guess. When J. P. Morgan was asked what the stock market will do, he replied: “It will fluctuate.” His response may seem flippant, but in actuality it is one of the most instructive quotes concerning markets and investing. Perfect insight into future market performance would involve knowing what is going to happen and when it is going to happen. He has clearly told us what will happen, half of what we want to know. Unfortunately, the other half, when it will happen, is largely unknowable.

    When looking at a historical graph of stock market performance we clearly see the fluctuation that J. P. Morgan spoke of. We also see that stock markets generally move higher (from bottom left to upper right) in value over the long-term. Successful investing entails using this knowledge that stock markets fluctuate up and down but increase in value over the long-term to our advantage.
    Mar 13, 2015. 07:19 PM | 3 Likes Like |Link to Comment
  • Income Strategy: Can You Afford To Play It Safe? [View article]
    DD – I concur in your and Adam’s point. My situation is that I hold individual dividend growth stocks in a taxable account. As you know, this leads to a different thought process than if the assets were held in a tax deferred account. Therefore, “the decision to hold a stock is a decision to buy the stock” is not a complete analysis for me. As I posted above, to a comment made by Six, the decision to sell involves a reasonable expectation that I can recover the lost income and capital gain taxes. For me, while I consider the market to be overvalued it is not so excessive that I am considering lots of selling.
    Mar 13, 2015. 06:45 PM | 5 Likes Like |Link to Comment
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