Thu, Oct 23, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Marcum LLP and Twenty-First Securities Corp. urge public companies to pay 2012 dividends before year-end; help shareholders avoid major tax increases of the fiscal cliff

Monday, October 15, 2012
Opalesque Industry Update: Marcum LLP, and Twenty-First Securities Corporation, are joining forces to urge publicly traded companies to pay year-end 2012 quarterly dividends to shareholders on or before December 31, when the tax cuts enacted by the Bush administration in 2003 are due to expire. By moving their payable dates into the current calendar year, public companies will enable shareholders to benefit from the current 15% dividend tax rate before an anticipated tax hike takes effect as of January 1.

"Unless the Bush tax cuts are extended, shareholders will have tremendous tax exposure in 2013, with rates that could potentially triple. Moving their dividend pay dates into the 2012 tax year is an easy, no-cost way for companies to help shareholders avoid the extreme impact of this part of the so-called fiscal cliff," said Joseph Perry, Marcum Partner-In-Charge of Tax and Business Services.

Robert N. Gordon, president of Twenty-First Securities Corporation, offers an example using Wal-Mart Stores, Inc.'s (NYSE:WMT) already declared dividend to be paid on January 2, 2013, for shares held as of December 7, 2012. "We estimate that there will be dividends issued to individual shareholders on that date totaling $922.0 million. At the 2012 rate of 15%, shareholders will pay $138.3 million in taxes on those dividends. If received in 2013, those same dividends will cost shareholders a minimum of $173.3 million (at 18.8%) or as much as $400.1 million (at 43.4%), absent an extension of the lower rate," Mr. Gordon states. The 18.8% rate reflects the current 15% dividend tax plus a 3.8% Medicare surcharge on unearned income. The 43.4% rate includes a 39.6% tax on dividends as ordinary income plus the 3.8% surcharge.

"By rolling their dividend pay date back by just 48 hours, Wal-Mart alone could potentially save shareholders $261.8 million. Multiply that by all the companies that issued prior quarter dividends in just the first two weeks of this year, and the tax savings are in the billions. That's what I call economic stimulus!," Mr. Gordon says. Between January 1 and January 15, 2012, $16.1 billion in dividends were paid by 256 companies.

"This is the most attractive and accessible option available to public companies looking for shareholder friendly programs. We are recommending that all our publicly traded clients move their fourth quarter dividend pay dates into 2012," said Robert Spielman, a Partner in Marcum's Tax and Business Services Division and a member of its State and Local Tax Practice group.

Marcum

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   

Banner

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  2. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  3. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  4. Goldman in talks to acquire IndexIQ[more]

    From Bloomberg.com: Can Goldman Sachs put ETF investors on a liquid diet? Goldman is in talks to acquire IndexIQ, Reuters has reported. Index IQ is a small exchange-traded-fund firm known mostly for products that replicate hedge fund strategies, called "liquid alternative" ETFs. While IndexIQ has 11

  5. Other Voices: CALPERS dilemma should be a warning to hedge funds wanting institutional investors[more]

    From Ian Hamilton, founder of IDS Group. A quick comment on the CALPERS’ disinvestment from the hedge fund market and the jitters it is causing. Pension Funds should not be sheep and follow CALPERS’ decision as the issues that CALPERS has with hedge fund investments are in many ways unique t