Back door end to short selling

Discussion in 'Trading' started by thetraderprofit, Feb 21, 2004.

  1. Under the new tax rules, stock that is held with a broker in a margin account and is loaned out by the broker, is subject to ordinary dividend tax rates TO THE CUSTOMER.

    The payment in lieu of dividend received by the customer does not receive qualified dividend treatment.

    I'll bet this has a dramatic impact on the stock loan business, and, ultimately, on short-selling.