If a security pays a dividend, depending on the holding period of said security, the dividend might be considered "qualified" and taxed at a lower rate. What if the security is held with borrowed money (on margin)? Does the tax treatment change? Meaning, regardless of whether it's a qualified dividend, would it lose the tax advantage?
What if the security is a Municipal Bond ETF? Dividends on these ETFs stem from interest payments which makes them completely tax free. Would these dividends lose their tax free status if the ETF is held on margin?