TLT and SHY income classification

[D]

How is TLT and SHY income classified on your tax documents: as "dividends" or as "interest"? My broker informed me that they'd withhold 30% tax for me as a non-resident alien if it's paid out as dividends and no withholding if it's paid out as interest.

[dualstow]

No one has answered this? I bought TLT yesterday, but I've only held treasuries directly up 'til now. I'll be waiting for DIVs or INTs next year.

[AdamA]

I don't own either of them, but I'm 99% certain you'll get a 1099 int next year, not div.

[chrikenn]

Agree.  I didn't own TLT in 2010 but I do now.  For every other bond fund I've owned though, I've gotten a 1099-INT.

Actually, check that.  For an international bond fund (RPIBX) I am slowly phasing myself out of, I got a 1099-DIV, even though it paid monthly distributions.

I still think TLT will probably be a 1099-INT, but maybe someone that has actually received tax docs from the ETF can tell us for sure.

[Boeing737]

Both TLT and SHY on my 1099-div show as nonqualified dividends.

[chrikenn]

Both TLT and SHY on my 1099-div show as nonqualified dividends.

I think he's asking whether the form is a 1099-DIV or a 1099-INT, not whether the interest is qualified.  So you are saying that they do indeed send out a 1099-DIV as opposed to a 1099-INT?

[Boeing737]

It's on a 1099-DIV.

[fnord123]

I just noticed this topic.  My understanding is non-qualified dividends on a 1099DIV (which apparently TLT provides) is basically the same as receiving interest in terms of tax treatment.  So D, dualstow, if you are asking from a tax consideration point of view, TLT gives no advantage over holding treasuries.  Actually, it might give less - if someone has 1099DIV for TLT, can they still avoid paying state and local taxes like they can for a 1099INT from treasuries?

[dualstow]

I just noticed this topic.  My understanding is non-qualified dividends on a 1099DIV (which apparently TLT provides) is basically the same as receiving interest in terms of tax treatment.  So D, dualstow, if you are asking from a tax consideration point of view, TLT gives no advantage over holding treasuries.  Actually, it might give less - if someone has 1099DIV for TLT, can they still avoid paying state and local taxes like they can for a 1099INT from treasuries?

Ah, good question. I assumed because it holds treasuries that TLT is free of state and local. But, it's best to avoid wishful thinking when it comes to taxes. In fact, I should abandon all optimism whatsoever. ;-)

While I was also curious about the OP's question, I won't have to concern myself with TLT tax for a few decades, as it's actually in my 401(k).

[moda0306]

Dividends are treated as the interest would be...

Nontaxable for state purposes.