(NZT) (TMX) Buying some cheap telecoms - Telmex and Telecom New Zealand
This entry was posted on 28 Apr 2006, 4:45 PM and is filed under My Portfolio Trades.
In this world of a falling dollar I can't help but pick up some high dividend paying low valuation stable earnings oriented telecom companies. I added to my position in Telecom New Zealand (NZT) and I bought back the May 20 strike calls sold agains my small Telmex (TMX) position.
Note regarding dividends paid by foreign corporations: Both of these stocks are American Depository Receipts and represent shares issued by non-US corporations. Dividends on these companies are taxed at the regular income rate not the special 15% rate for US corporations.
Disclosure: I own Telecom New Zealand (NZT) and Telmex (TMX). I am also short jan 2007 - 15 strike puts on TMX. (I'd be very happy to own it at that price.)
Dividends on foreign equities that trade in the US (like adrs) and pay dividends out of profits which you hold for 60 days before and after the ex-dividend date DO qualify for the special 15% tax rate. See this link: http://www.associatedcontent.com/article/20654/do_adrs_qualify_for_the_special_tax.html Reply to this
1 May 2006, 11:32 AM
David Neubert wrote:
I went to the IRS site on Qualified Foreign Dividends
and it would seem you are right. Now my question is how do I get
my brokers to stop reporting these dividends as non-qualified when it
seems the IRS would considered them qualified.
