Thought the dividend tax rate was the lower. (Still 15%, right?) Although probably not the first one, but correct me if I am wrong, the 2nd, 3rd, and 4th dividend, if you hold it for more than a quarter, is taxed at the lower long term rate. Certainly after a year it is, just like long term cap gains.
This is why you have a plan going in: is it a trade or an investment?
Me, I employ a hybrid dividend capture system, so yes, I used an IRA account to sell a cash covered put today on T. The premium was worth about one quarterly dividend. If it closes Friday below the strike, I will become a proud owner of shares and collect the actual dividend on Wednesday. Then it will be time to sell a covered call on it. Or I might even do that Monday or Tuesday depending on how the market goes.
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