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Gold/Mining/Energy : McEwen Mining -- Ignore unavailable to you. Want to Upgrade?

To: Erie who wrote (14290)	1/13/2016 9:12:50 AM
From: JW@KSC	1 Recommendation Recommended By Oldbasalt Respond to of 24510

Expansion in Detail - Dividends Are A Return Of Capital And A Return On Capital

To: Erie who wrote (14290)	1/13/2016 12:34:52 PM
From: benwood	Respond to of 24510

In simple terms, they are giving you back some of the money you paid for your stock. Therefore, it reduces your cost basis. When you eventually sell, that lowered cost basis increases (hopefully -g- ) your capital gains tax. So you gotta keep track of it precisely. Maybe the brokers do it for you now... There can be some advantages to it -- you might be in a long term capital gains category when you finally sell. The shares I've owned which paid dividends out of capital did so because they were either losing money, or not making enough to cover all the dividend. So that was the downside... I'd rather they were making lots of money at the time. One issue was FAX, of which I have a couple shares left. They did so in order to maintain the income stream of the shareholders after interest rates collapsed in '07 and '08. Ultimately, it means they will burn through too much capital to maintain the dividend, versus a company with profits they plow back into the company and only a portion of the earnings distributed to shareholders.