Sun, Apr 20, 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. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo