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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (62836)6/20/1999 11:41:00 AM
From: accountclosed  Read Replies (1) of 132070
 
MB we debated dividend capture somewhat on the Myth thread. I contended that the main motivation for dividend capture was tax advantage that certain types of taxpayers, in certain countries/industries enjoyed. Obviously there is no free lunch when a stock goes x-dividend, the stock price is marked down by the amount of the dividend. So the dividend captured tends to be offset by the capital loss on the shares. However if a taxpayer was exempt or largely exempt on dividend income and able to deduct the capital loss, it might make up for the costs of the transaction. I recall that Japanese insuarance companies were often cited as being behind dividend capture plays.

My question is what has reduced this activity in recent years? Closure of tax loopholes, much lower dividends, or both?

tia
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