I always get confused between these:
Current E&P: Taxable Dividend
Accumulated E&P: Taxable Dividend
Return of Capital: Tax free and reduces basis of common stock
Capital Gain distribution: Taxable income as a capital gain
I understand the logic behind it, but I'm confused as to the rate shareholder will be taxed. Am I correcting in understanding that Taxable dividend will be taxed as ordinary rate...unless they qualify for 60-120-60 day period (then it will be a lower rate). Capital gains will be taxed based on whether it was long or short term.
I'm just confused between the rates...can someone explain it to me? Thanks:)





