Expert: Docs99 Date: 9/9/2005 Subject: tax break on dividends
Question Hello,
Thank you first of all for taking my question.
I've been considering buying a Vanguard mutual fund which invests in dividend paying stocks. This investment will be for the long term (10 years or more) and I like the idea of receiving income through dividends while waiting for capital appreciation.
One of the main reasons for my interest in purchasing the dividend –income mutual fund is because of the somewhat recent tax break on dividends. However, I understand that there is a “sunset” on this tax break on dividends and that it will expire in year 2008.
My question is this: what are the chances of this sunset provision being extended or the tax break becoming permanent? Can one know for sure or take an educated guess?
Answer Your guess is as good as anybody's. There are so many variables and the state of affairs can change in such a way that we cannot know for sure and any educated guess is just that: a guess. Sorry. 2008 is quite far away and keep in mind that by the end of 2008 a new president will be ready to be sworn in. Also, the composition of the house and senate may change. You know the old saying, the crystal ball has all the answers... if only we could find them ....
