My understanding is that qualified dividends are when you've held the stock (or ETF) for 60 or more days, and non-qualified dividends are when you've held the stock for less than 60 days. Qualified dividends, of course, are taxed at the capital gains rate, whereas non-qualified dividends are taxed at the income rate. Thus, qualified dividends are preferred. This is the best way I can explain it without writing a novel.
What, then, if some of my shares of stock (or ETF) are held for more than 60 days, while some are held for less? This could easily happen if you're DCAing. Do my dividends (or fund distributions, if ETF) get taxed as qualified dividends, or non-qualified dividends? Or is it split between qualified and non-qualified, based on how much of each I have??? I'm sure I am overthinking this, but I guess I'm trying to figure out the implications.
I hope my question makes sense. But tl;dr are stock dividends (or ETF distributions) categorized (as qualified dividends vs non-qualified dividends) lot by lot, or are all lots of the same stock/ETF lumped and given the same category?
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