Why in this example is only 50% of the dividend qualified instead of 100% of the dividend?

Question

Example taken from here:

(...) The dividend income from the 2,000 shares held 49 days would not be qualified dividend income. The dividend income from the 8,000 shares held at least 61 days should be qualified dividend income.

(...)

To continue with the example above, a dividend of $0.18 per share was paid but only 50% of that dividend ($0.09 per share) was reported as a qualified dividend. Since you only held 8,000 out of your total 10,000 shares for the required holding period, the calculation to determine the amount of eligible qualified dividends would be:

8,000 shares times $0.09 qualified dividend per share equals $720 actual qualified dividend. Of the $1,800 reported as ordinary dividends for XYZ fund in line or column 1a of Form 1099-DIV, only $900 would be reported in line or column 1b as a Qualified Dividend. Of that $900, only $720 should be taxable at one of the more favorable rates. The remaining $1,080 of dividends reported would be taxed at your ordinary income tax rate.

Why, in this example, is only "50% of [a dividend of $0.18 per share] reported as a qualified dividend"? Is there some twist to the example not explained (like, 50% of the dividends from the 8,000 shares are disqualified for some reason not listed above)?

Why wouldn't 100% of the dividends be reported as a qualified dividend (given you held those 8,000 shares for the holding period and there are no other disqualifiers for those dividends received from the 8,000 shares)?

Answer 1

There are two aspects of qualifying dividends. The first is how much of the distribution is qualified/unqualified and secondly, does your holding period qualify you for preferential tax treatment.

Here's a list of non qualified dividends:

https://www.irs.gov/publications/p550#en_US_2017_publink100010086

There are a number of types/sources of dividends that are unqualified and do not qualify preferential tax treatment. The explanation in your link does not address this. It just provides an example that states that there is an $0.18 per share dividend with only 1/2 of it being qualified. It then demonstrates how 2,000 shares held do not meet the qualifying period while 8,000 do.