Corporate shareholders are allowed to treat a portion of the dividends received from regulated investment companies (RIC) as business interest income, also known as Section 163(j) interest dividend for purposes of determining their limitation on the deduction for business interest expense.
To be eligible for the business interest income treatment, the corporation must have held the shares on which the dividend was paid for more than 180 days during the 361-day period that began 180 days before the fund’s ex-dividend date (ex-date). The ex-date is the date on which the dividend is deducted from the fund’s per share net asset value. For purposes of the holding period, you may not count the day on which the shares were purchased or acquired by reinvesting dividends, but you may count the day the shares were sold. This holding period requirement does not apply to certain types of funds. See footnote 1 below.
The worksheet helps calculate the portion of each fund’s Total Ordinary Dividends that is treated as business interest income. Funds not listed in the chart below did not have any business interest income.
For each fund owned, compute the Total Ordinary Dividends received (for instructions, see Additional Information for Corporate Shareholders). Enter the result in the Total Ordinary Dividends box next to the fund’s name below, and click Submit.
To determine your individual tax situation, please consult your tax advisor.