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Consider, for example, the following dividend distribution table for SPY:

http://finance.yahoo.com/q/hp?s=SPY&a=00&b=29&c=1993&d=08&e=19&f=2013&g=v

When an entry in the table says for example 0.839, is that after the 25% withheld tax reduction? In other words, was the actual dividend (0.839 / 0.75) = ~1.119 and the quote was taken after the tax reduction ?

Suppose for the purposes of this question that I'm holding the ETF in a normal US taxable account (In my case I hold it in an Israeli account but the tax treaty between our countries still specifies 25% withheld tax).

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  • If you hold it in your Israeli brokerage account, the broker will take care of the taxes for you.
    – littleadv
    Sep 19, 2013 at 17:33

2 Answers 2

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No. As a rule, the dividends you see in the distribution table are what you'll receive before paying any taxes. Tax rates differ between qualified and unqualified/ordinary dividends, so the distribution can't include taxes because tax rates may differ between investors.

In my case I hold it in an Israeli account but the tax treaty between our countries still specifies 25% withheld tax

This is another example of why tax rates differ between investors. If I hold SPY too, my tax rate will be very different because I don't hold it in an account like yours, so the listed dividend couldn't include taxes.

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The dividend quoted on a site like the one you linked to on Yahoo shows what 1 investor owning 1 share received from the company. It is not adjusted at all for taxes. (Actually some dividend quotes are adjusted but not for taxes... see below.)

It is not adjusted because most dividends are taxed as ordinary income. This means different rates for different people, and so for simplicity's sake the quotes just show what an investor would be paid.

You're responsible for calculating and paying your own taxes.

From the IRS website:

Ordinary Dividends

Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. They are paid out of earnings and profits and are ordinary income to you. This means they are not capital gains. You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive.

Now my disclaimer... what you see on a normal stock quote for dividend in Yahoo or Google Finance is adjusted. (Like here for GE.) Many corporations actually pay out quarterly dividends. So the number shown for a dividend will be the most recent quarterly dividend [times] 4 quarters. To find out what you would receive as an actual payment, you would need to divide GE's current $0.76 dividend by 4 quarters... $0.19. So you would receive that amount for each share of stock you owned in GE.

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  • Just to be sure, your last paragraph isn't referring to SPY, correct? The data on SPY is referring to the quarterly dividend, so you would receive $0.839 per share, not 0.839/4 per share. Sep 19, 2013 at 13:28
  • @JohnBensin That's right... that's why I edited my answer. The 'normal' stock quote that I think about when anyone mentions a stock dividend is as I referenced in my last paragraph. Technically OP is asking about the dividend payout from an ETF, not a stock. The dividend yield on an ETF with varying payouts is pretty complicated and that's why just looking up SPY will show a 'yield' but not the classic $X.XX / %%% format that a standard stock will show.
    – THEAO
    Sep 19, 2013 at 13:36
  • Right. The dividend yield can be tricky, but the dividend amount you receive for an ETF is straightforward, and I just wanted to make sure we were on the same page. Sep 19, 2013 at 13:41

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