Fri, Jul 31, 2015
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   |   
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: Despite bumpy June/July, CTAs hold on[more]

    Bailey McCann, Opalesque New York: To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday,

  2. Investing - Hedge funds, seeing opportunity, invest in struggling hotels in Puerto Rico[more]

    From NYTimes.com: Puerto Rico’s tourism industry has fallen victim to the island’s struggling economy, hit by one misfortune after another. In March, the San Juan Beach Hotel filed for bankruptcy. This week, the Condado Plaza Hilton was forced to close its casino. But nearly two thousand miles away,

  3. Investing - Hedge fund billionaires bet on London as revival gathers pace[more]

    From Bloomberg.com: London’s fund industry is bouncing back, and U.S. billionaires Steven A. Cohen and Ken Griffin are grabbing a piece of the action. Griffin’s Citadel and Millennium Management, a hedge fund run by Israel Englander, have bulked up in London, where asset growth is outpacing the U.S.

  4. Opalesque Roundup: Hedge fund assets rose to 11th consecutive quarterly record level: hedge fund news, week 31[more]

    In the week ending 24 July, 2015, the total global hedge fund industry assets rose to the 11th consecutive quarterly record level in 2Q15 to $2.97tln; Eurekahedge reported that hedge funds raised $93bn in the first six months of 2015; The SS&C GlobeOp Forward Redemption Indicator for July 201

  5. Other Voices: Same day reporting and the evolving role of fund administrators[more]

    By: Scott Price, Head of Business Development and Client Management for North America, Maitland Ernst & Young’s latest glob

 

banner