Dividends/Distributions?

Question

Do you have to own a stock for the whole month it pays a dividend or as long as you own it before the ex-trading date you will receive it? So if you buy a stock and it is finalized one day before the ex-trading date you will still receive it? Thanks in advance.

Answer 1

If you are thinking of buying a stock just to collect a dividend and then selling it, consider the tax implications.  If, as others have suggested, the stock trades lower after going ex-dividend, you might have a capital loss that you cannot write-off for tax purposes.  Capital losses can only be applied against capital gains. So even with a healthy dividend tax credit you just might end up down

Answer 2

yes,i;m trade in china,

often have some in stock products,

so some time i send it to local shop,

maybe i can sell some to you.

hehe

Answer 3

As long as you own it before the ex-date, you will receive the dividend.  Unfortunately, the stock price often goes down after the dividend is paid out, so it may end up being a negative transaction for a while, even with the inclusion of the dividend.  That is why people often wait until after the ex-date to buy.

Answer 4

Besides the fact that the stock usually opens down by the amount of the div on ex-div date.  In order for a "qualified" dividend to qualify as a long term gain for US tax purposes, you have to own the stock for at least a 61 day period overlapping ex-div.  Otherwise the div would be a short term gain at your normal tax rate.

While you only need to buy the stock before ex-div date and can sell it ex-div or later to get a dividend that pays later, whether that results in a gain or loss depends whether there is some other factor to move the price back up after ex-div dip.