How to know if a dividend is qualified before year-end

Question

I bought the Australian stock Reckon (Yahoo) in July. In November, it paid a very large dividend. For my tax planning, I need to know if that dividend is qualified or not, in order to know whether it will be taxed as ordinary income or at the capital gains rate. The 1099 will tell me this next year, but I need to know it now, as I said, for tax planning.

I know the general rules for qualified dividends, which include the holding period, the kind of tax treaty the stock's country has with the US, and whether it's subject to certain exceptions. So I don't need links to the many places on the Internet that repeat those rules. The rules are very complex, so I need to know the specific determination of whether this particular dividend is qualified.

I called the broker. The phone agent said they get the information for the 1099 from a third party, and he wasn't able to get the name of that third party. But he was able to check Refinitiv, which is one of those expensive data services, similar to Bloomberg. Refinitiv told him that dividend is qualified. That's great news, but he wasn't able to send me a screen shot or any other verification of the information. I don't want to just take his word for it; I need solid verification of whether this dividend is qualified or not.

The information for whether this dividend is qualified is not going to change between now and the time the 1099 is issued. So whoever makes that determination has the ability to do it now, as apparently Refinitiv has done. How can I get that information?

Edit 1: Why I need this information now.

There are a comment and an answer, both by "littleadv", that say I should be fine waiting for the 1099 to find out for sure if the dividend is qualified. Here is why I need to know now.

If the dividend is qualified, then it gets capital gains treatment, and I'm fine with that. If it is not qualified, then it gets treated as regular income and I'll owe substantial tax on it. If that's the case, then I want to sell something to incur a loss to offset the income from the dividend. That's what I meant above by tax planning. If I'm going to make that sale, I need to do it before the end of the year, so I can't wait for the 1099 to answer the question.

Edit 2: Why I need verification.

The answer by "littleadv" says that I've already figured it out and that Refinitiv doesn't know any more than I do. That's definitely not true.

Last year, I had dividends from several Australian companies. My 1099 told me that most of them were qualified, but one of them wasn't. That tells me that Australia has the right kind of treaty with us that allows a dividend to be qualified. But for that one dividend that wasn't qualified, I have no idea why it wasn't. The rules are very complex and I don't know enough to apply those rules and get the right answer. I presume that Refinitiv has the expertise to do that. Somewhere there are other people who know how to do it. That's what I'm looking for.

The reason I need verification of what the broker told me on the phone is that having the wrong information could cost me money. If I sell a stock to incur a loss and the dividend was qualified, then I will have sold that stock unnecessarily. (Yes, I could buy it back a month later and not have a wash sale, but it would be cleaner not to sell it in the first place if I don't have to, and also, it could go up during that month.) If I don't sell a down stock and it turns out the dividend is not qualified, then I will owe taxes on the dividend at the regular rate, which I would prefer to avoid. So I want to have accurate information on whether the dividend is qualified.

Answer 1

The 1099 will tell me this next year, but I need to know it now, as I said, for tax planning.

For your planning you don't need any formal verification. You can do the math yourself and pay the estimated amount based on the calculations.

So whoever makes that determination has the ability to do it now, as apparently Refinitiv has done. How can I get that information?

It's no magic. Refinitiv did exactly what you described you did yourself: analyzed the stock, the tax treaty, and the brokerage fed in the holding periods and other variables that are specific for shareholder. It appears you've done all these already and reached the same conclusion as Refinitiv.

I don't want to just take his word for it; I need solid verification of whether this dividend is qualified or not.

You don't. You want it, but it's not the same. The solid verification comes on 1099-DIV which you should be getting in a couple of months, but you can calculate it yourself following the criteria checklist. No brokerage would provide you any written guarantee before they're able to issue a proper 1099.

If you want to absolutely cover yourself for the risk of underpayment penalty, follow the safe harbor rule:

Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen, certain household employers and certain higher income taxpayers. For more information, refer to Form 1040-ES, Estimated Tax for Individuals.

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Re your edits:

If that's the case, then I want to sell something to incur a loss to offset the income from the dividend.

You can't. It doesn't matter how dividends are taxed, they're still dividends - ordinary income. They can only be offset by capital loss in excess of your capital gains up to $3K/year.

The rules are very complex and I don't know enough to apply those rules and get the right answer... Somewhere there are other people who know how to do it. That's what I'm looking for.

You're complaining that you don't have enough expertise to evaluate the facts you know and are asking for a recommendation, that's off topic here. You can pay Refinitiv to provide you the analysis, or hire any EA/CPA licensed in your State for that. For significant amounts involved, you may even want to pay the IRS itself to provide you the analysis (it's called "Private Letter Ruling"). You'll probably want a tax attorney draft that request for you.

If I sell a stock to incur a loss and the dividend was qualified, then I will have sold that stock unnecessarily

We've covered that, it doesn't matter how your dividend is taxed for this point.