Minimize Taxes by Trading Dividends For Capital Gains

Number of Shares
Dividend Yield
Dividend Growth Rate (Annual)
Beginning Stock Price
Marginal Tax Rate on Dividends (Federal + State)
Marginal Tax Rate on Short-Term Cap Gains (Federal + State)
% of Gains Offset by Capital Losses
Cost per Trade ($)
Number of Years
The total return due to dividends using the capital gains/dividends tradeoff strategy is 149.2 % vs. 128.5 % when not using this strategy. At the end of 10 years you will have accumulated $37,299 in dividends vs. $32,131 when not using this strategy.
*Calculations for dividend tax strategy assume quarterly dividend payments and one buy and one sell per quarter.

Definitions:

Number of Shares:

The amount of the initial investment.

Dividend Yield:

The dividend yield of the stock being analyzed.

Dividend Growth Rate:

The assumed annual growth rate of the dividend.

Beginning Stock Price:

The price of the stock as of the beginning of the analysis date.

Marginal Tax Rate on Dividends:

The combined federal and state tax rates you would expect to pay on dividends for this stock.

Marginal Tax Rate on Capital Gains:

The combined federal and state tax rates you would expect to pay on short-term capital gains for this stock.

% of Gains Offset by Capital Losses:

The % of capital gains (when using the capital gains/dividend tradeoff strategy) that you can offset with capital losses.

Cost Per Trade ($):

The amount you are charged for each stock trade.

Number of Years:

The number of years to pursue the capital gains/dividend tradeoff strategy.