what it means for investors
most regular dividends from u s corporations are considered qualified but there are considerations for foreign companies real estate investment trusts reits master limited partnerships mlps or tax exempt companies a foreign corporation qualifies for the special tax treatment if the company is incorporated in the united states the corporation is eligible for the benefits of a comprehensive income tax treaty with the u s or the stock is readily tradable on an established securities market in the u s a foreign corporation is not qualified if considered a passive foreign investment company 2some dividends are automatically exempt from consideration as qualified dividends these include dividends paid by real estate investment trusts reits master limited partnerships mlps employee stock options and those on tax exempt companies dividends paid from money market accounts such as deposits in savings banks credit unions or other financial institutions do not qualify and should be reported as interest income 5special one time dividends are also unqualified and qualified dividends must come from shares not associated with hedging such as those used for short sales puts and call options these investments and distributions are subject to the ordinary income tax rate 