Chronology:
10/18/2018: Father purchased $VOO
11/27/2019: Father gifted me $VOO for Medi-Cal planning purposes.
12/27/2019: I received a dividend from $VOO, 1 month after the gift.
12/30/2019: I sold and then rebought all of the gifted shares of $VOO to harvest gains for 2019. Therefore, I didn’t hold the stock for more than 60 days during the 121 day period for the dividend.
Some dividend date information for $VOO (VANGUARD S&P 500 ETF):
https://www.nasdaq.com/market-activity/funds-and-etfs/voo/dividend-history
Ex/EFF DATE / DECLARATION DATE / RECORD DATE / PAYMENT DATE
12/23/2019 12/20/2019 12/24/2019 12/27/2019 <<< Dividend in question
09/26/2019 09/24/2019 09/27/2019 10/01/2019
06/27/2019 06/25/2019 06/28/2019 07/02/2019
03/21/2019 03/20/2019 03/22/2019 03/26/2019
https://www.irs.gov/instructions/i1040gi#idm[phone number removed]888
“Qualified Dividends
Exception: Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but aren't qualified dividends. These include:
-Dividends you received on any share of stock that you held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock isn't entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock but not the day you acquired it. ”
https://www.investopedia.com/terms/q/qualifieddividend.asp
“The holding period
The IRS requires investors to hold shares for a minimum period of time to benefit from the lower tax rate on qualified dividends. Common stock investors must hold the shares for more than 60 days during the 121-day period that starts 60 days before the ex-dividend date, or the date after the dividend has been paid out and after which any new buyers would then be eligible to receive future dividends. “
My 1099-DIV reports the 12/27/19 $VOO dividend as “qualified”, but my understanding is it isn’t actually qualified if the stock wasn’t held for more than 60 days during the 121 day period mentioned above in the links. Ex-div date for this dividend was 12/23/2019.
Because this stock was gifted to me on 11/27/2019, then sold on 12/30/2019, I didn’t hold it for more than 60 days. Does the time my father held the stock before gifting it count towards the 60 days the IRS is referring to above, meaning I can declare the 12/27/19 dividend as qualified? Or should this only be an ordinary dividend?
Thank you.
