G2 Fintech has improved the dividend analysis features in its tax analysis software TaxGopher.
With the new features, TaxGopher now considers mitigated risk of loss in treating qualified dividends and dividend received deductions.
To determine if a dividend qualifies for preferential tax rates, a taxpayer must not only verify that the dividend-producing equity was held for the required length of time, but must also check to see if the risk of loss incurred by the equity position was mitigated during the eligibility period, according to the company. If the taxpayer considers only the holding period and fails to consider mitigated risk of loss, they risk incorrectly claiming a dividend as qualified, when it must in fact be taxed at ordinary dividend rates. TaxGopher’s new features can help prevent clients from getting these steps wrong.
“The only way to accurately address qualified dividends is to have a solution that already handles straddles and constructive sales processing, as our software does,” said G2 FinTech CEO George Michaels in a statement.
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