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TLT and SHY income classification
Posted: Fri May 21, 2010 11:45 am
by 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.
Re: TLT and SHY income classification
Posted: Wed Feb 23, 2011 7:26 am
by 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.
Re: TLT and SHY income classification
Posted: Wed Feb 23, 2011 8:12 am
by AdamA
I don't own either of them, but I'm 99% certain you'll get a 1099 int next year, not div.
Re: TLT and SHY income classification
Posted: Wed Feb 23, 2011 9:11 am
by 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.
Re: TLT and SHY income classification
Posted: Wed Feb 23, 2011 3:09 pm
by Boeing737
Both TLT and SHY on my 1099-div show as nonqualified dividends.
Re: TLT and SHY income classification
Posted: Wed Feb 23, 2011 6:47 pm
by chrikenn
Boeing737 wrote:
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?
Re: TLT and SHY income classification
Posted: Fri Feb 25, 2011 6:46 am
by Boeing737
It's on a 1099-DIV.
Re: TLT and SHY income classification
Posted: Mon May 09, 2011 4:44 pm
by 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?
Re: TLT and SHY income classification
Posted: Mon May 09, 2011 5:28 pm
by dualstow
fnord123 wrote:
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).
Re: TLT and SHY income classification
Posted: Tue May 10, 2011 7:53 am
by moda0306
Dividends are treated as the interest would be...
Nontaxable for state purposes.