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Preferred Outcomes - The Tax Advantages of QDI

May 4, 2021

Qualified Dividend Income tax rules allow certain dividends from US corporations and qualified foreign corporations to be taxed at rates lower than ordinary income tax rates. This may equate to substantial tax savings for investors – especially those in higher tax brackets.

Currently, the maximum tax rates on qualified dividends¹ are 0%, 15% or 20% depending on your income level.

Over half of the preferred securities market is eligible for QDI treatment today. Utilizing QDI eligible preferred securities has the potential to enhance after tax income and total return which can be a very under-appreciated benefit of investing in preferred securities. To learn more about the tax advantages of QDI, please watch the below video.

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Please contact your tax advisor for further discussion on QDI tax matter as neither Flaherty & Crumrine nor Destra Capital provides tax advice.