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Act 40 Dividends Research Platform tracks, reclassifies, and monetizes the distributions of over 500 Closed-End-Funds.

INVESTMENT  COMPANY ACT OF 1940 - DIVIDENDS.


section 19:  it shall be unlawful for any registered investment company to pay any dividend, or to make any distribution in the nature of a dividend payment , wholly or partly from any source other than--
​         (1) such company's accumulated undistributed net income, determined in accordance with good accounting practice and not including profits or losses realized upon the sale of securities or other properties; or
​          (2) such company's net income so determined for the current or preceding fiscal year;
​unless such payment is accompanied by a written statement which adequately discloses the source or sources of such payment

WHY SHOULD INVESTORS CARE?

 

Generally, dividend income is taxed as ordinary income, which carries the highest tax rate possible for an individual investor. Section 19a notices alert investors that a portion of an upcoming dividend is either being tax classified as a long-term gain or as return of capital. Long-term gains offer the lowest possible tax rate for an investor and return of capital bears no immediate tax liability as it lowers your cost basis in the investment.

HOW CAN INVESTORS BENEFIT?

 

The Investment Company Act of 1940 governs three types of investment management companies: Mutual Funds, Closed-End Funds, and Exchange-Traded Funds. Unlike its peers, Closed-End Funds can trade at substantial discounts to their underlying net asset value. These discounts create an opportunity for investors to buy $1 worth of tax-advantaged dividends for less than $1

 
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