Qwest Communications Announces Tax Treatment for 2008 Dividends
Qwest Communications International Inc. (NYSE: Q) today announced the expected tax treatment for its 2008 dividends. During 2008, Qwest paid quarterly dividends on its common stock that amounted to $0.32 per share. For United States federal income tax-reporting purposes, the company will report the 2008 dividends as non-taxable distributions.
Non-taxable distributions are generally treated as a return of capital to the extent of a shareholder’s basis in his or her shares. Accordingly, these non-taxable distributions reduce that tax basis. Once a shareholder’s basis is reduced to zero, non-taxable distributions generally will be taxed as capital gains.
While the above information includes general statements about the tax classification of dividends paid on Qwest common stock, these statements do not constitute tax advice. The taxation of corporate distributions can be complex, and stockholders are encouraged to consult their tax advisers to determine what impact the above information may have on their specific tax situation.
The common stock dividend of $0.08 that was announced on Dec. 11, 2008, with a record date of Feb. 13, 2009 and a payable date of March 6, 2009, will be reported for income tax purposes in 2009. The company will not be able to calculate the tax classification of dividends paid in 2009 until 2010. The tax classification of 2009 dividends will be reported in early 2010.
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