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Store Capital Random Transactions


LLD

Question

I have about a dozen random transactions on my account referencing Store Capital. Funds are debited that look like old dividend payments being reversed then about 4 or 5 days later funds are credited to my account referencing a Store Capital dividend but the amount credited back is always less than what was debited. Why is this? And who is holding the difference in amount?

I contacted Store Capital and they advised they have made absolutely no change/reclassification to any dividends.

 

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Hey. 

This stock has gone through an income reclassification process which the underlying company has initiated. Income reclassification refers to changes companies make to all or part of previously reported dividend income to some other tax classification. The process is as follows: 

  • A dividend is a distribution of a company’s earnings and profits.
  • A distribution by a corporation is taxed as a dividend to the extent of the corporations' earnings and profits, and any distribution in excess of the earnings and profits is generally a non-taxable return of capital.
  • In some cases, a company may have paid out more in distributions than it earned during the year.
  • In this situation, all or part of the distribution may be reclassified from a taxable dividend to a return of capital which is generally non-taxable.
  • A dividend may also be reclassified in other ways (i.e. the reallocation of ordinary dividends to tax-qualified dividends or dividends to capital gain distribution (for mutual funds)

This means the dividend adjustment have had to be CONTRA'd (reversed) and reissued under the companies newly classified valued.

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