Qwest Communications announced the expected tax treatment for its 2008 dividends. During 2008, Qwest paid quarterly dividends on its common stock that amounted to $0.32 per share. For United States federal income tax-reporting purposes, the company will report the 2008 dividends as non-taxable distributions.
Qwest said non-taxable distributions are generally treated as a return of capital to the extent of a shareholder’s basis in his or her shares. Accordingly, these non-taxable distributions reduce that tax basis. Once a shareholder’s basis is reduced to zero, non-taxable distributions generally will be taxed as capital gains.
Qwest announced a common stock dividend of $0.08 that on Dec. 11, 2008, with a record date of Feb. 13, 2009 and a payable date of March 6, 2009. This will be reported for income tax purposes in 2009.
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