WTH is Verizon up to?

Johnly

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Correct, but you can sell your shares once they decide to pull the dividend. Highly unlikely. There is no guarantee that you won't be bitten by a Bull shark and struck by lightning simultaneously while swimming in the Gulf of Mexico, but you might do it anyway.

Well, put it like that sarcastically, lol. Seriously, you can't tell people that they can invest in Verizon to offset the fee...fact is it may or MAY NOT offset the fee, but dividends are not definitive, nor are yields guaranteed. And there is that tax title that changes yearly as well. I just don't want people to go, "sweet, I can invest in Verizon to save money!" That is not correct sir. Again, no guarantees in the stock market.....hedge funds my man dictate a huge market manipulation whether people like to think it or not, and the sad thing is those guys manipulate those parameters without your knowledge.
 

bworley50

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Well, put it like that sarcastically, lol. Seriously, you can't tell people that they can invest in Verizon to offset the fee...fact is it may or MAY NOT offset the fee, but dividends are not definitive, nor are yields guaranteed. And there is that tax title that changes yearly as well. I just don't want people to go, "sweet, I can invest in Verizon to save money!" That is not correct sir. Again, no guarantees in the stock market.....hedge funds my man dictate a huge market manipulation whether people like to think it or not, and the sad thing is those guys manipulate those parameters without your knowledge.

I have said to you on multiple occasions that the dividends are not guaranteed. I also tell that to my clients. Tax policy is an overrated concern. Would you tell your boss you don't want a raise because you'd have to pay more in taxes? Remember, every dime of money you pay to Verizon is with after tax dollars. Tax policy doesn't change every year. The tax policy we have right now regarding stocks and dividends has been the same since 2004. It may change, but has very little to do with stock recommendations. Example: If I have a client who is living on social security and needs more income and they own Verizon or Philip Morris, should I tell them to sell it just because it is possible they may pay more in taxes? Quite the contrary, because any stock that pays a higher dividend needed to offset the tax burden will inherently carry more risk. When I see a fee like this being imposed, it only makes me want to buy the stock more. Hedge funds own approximately 7% of the shares. The media has you brainwashed. The majority of the owners in stocks like VZ and VZ specifically are mutual funds and ETFs, which in turn are owned by those people who own those funds. Stock prices and the dividends are a result of earnings (current and future), cash flow, assets and debt levels, the overall economy, and political events. I'm not trying to be rude, but if you like guarantees, just keep your money in a checking account, where currently you are losing money, yes losing money.
 
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dmmarck

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I have said to you on multiple occasions that the dividends are not guaranteed. I also tell that to my clients. Tax policy is an overrated concern. Would you tell your boss you don't want a raise because you'd have to pay more in taxes? Remember, every dime of money you pay to Verizon is with after tax dollars. Tax policy doesn't change every year. The tax policy we have right now regarding stocks and dividends has been the same since 2004. It may change, but has very little to do with stock recommendations. Example: If I have a client who is living on social security and needs more income and they own Verizon or Philip Morris, should I tell them to sell it just because it is possible they may pay more in taxes? Quite the contrary, because any stock that pays a higher dividend needed to offset the tax burden will inherently carry more risk. Hedge funds own approximately 7% of the outstanding shares. The media has you brainwashed. The majority of the owners in stocks like VZ and VZ specifically are mutual funds and ETFs, which in turn are owned by those people who own those funds. Stock prices and the dividends are a result of earnings (current and future), cash flow, assets and debt levels, the overall economy, and political events. I'm not trying to be rude, but if you like guarantees, just keep your money in a checking account, where currently you are losing money, yes losing money.

Just to clarify (and in no way do I dispute your assertions regarding stocks, we can let that sleeping dog lie and I'd prefer not to get in an argument regarding tax law v. business practices :))--

  1. While general tax policy does not "change" yearly, the tax laws do change yearly through Proposed and Temporary Regs. In fact, so much of the law shifts within months that it's hard to get a grasp on the sticky issues (e.g. 263A, FATCA, foreign holding companies, Subpart F regs, etc. etc.). (Also, the Bush tax cuts are set to expire next year in 2013, hence possible rates changes, particularly the dividend one which is an absolute monster of a deal for taxpayers.)
  2. Regarding the whole "turning down a raise"; believe it or not, scenarios like that actually happened with higher earning officers until the executive compensation rules were clarified with 404(a)(5), 409A, and the regs thereunder. See, the issue was taking the money now, throwing it into a trust (but then it being immediately taxable), or putting it in stock options. The problem was that for a while the law was not clear, so they'd either keep electing bonus/salary increase deferral or transfer such raises/deferrals into options. Now 409A clarifies that and you have a much more streamlined approach to executive and high-earning employee compensation, in addition to the recognized usage of the rabbi trust as having a trust but not really having a trust for tax purposes, thus no recognition now.
  3. I agree with you wholeheartedly; tax "policy" should not have anything to do with choosing stocks. It should have everything to do with the disposition, though, depending on holding period and such, which is why 1231 property is considered the best property one can own--you're not limited by the $3K capital loss limitation and the $3K stcg carry forward that keeps your books in line.

Enlightening discussion though, please continue b/c I think it's interesting how it's so interwoven with the issue at the root of the thread. In no way do I want my participation to appear as flaming, just wanted to contribute to the discussion, particularly in an area I have expertise (and I'm a massive tax nerd :D).
 

bworley50

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Just to clarify (and in no way do I dispute your assertions regarding stocks, we can let that sleeping dog lie and I'd prefer not to get in an argument regarding tax law v. business practices :))--

  1. While general tax policy does not "change" yearly, the tax laws do change yearly through Proposed and Temporary Regs. In fact, so much of the law shifts within months that it's hard to get a grasp on the sticky issues (e.g. 263A, FATCA, foreign holding companies, Subpart F regs, etc. etc.). (Also, the Bush tax cuts are set to expire next year in 2013).
  2. Regarding the whole "turning down a raise"; believe it or not, scenarios like that actually happened with higher earning officers until the executive compensation rules were clarified with 404(a)(5), 409A, and the regs there under. See, the issue was taking the money now, throwing it into a trust (but then it being immediately taxable), or putting it in stock options. The problem was that for a while the law was not clear, so they'd either keep electing bonus/salary increase deferral or transfer such raises/deferrals into options. Now 409A clarifies that and you have a much more streamlined approach to executive and high-earning employee compensation, in addition to the recognized usage of the rabbi trust as having a trust but not really having a trust for tax purposes, thus no recognition now.
  3. I agree with you wholeheartedly; tax "policy" should not have anything to do with choosing stocks. It should have everything to do with the disposition, though, depending on holding period and such, which is why 1231 property is considered the best property one can own--you're not limited by the $3K capital loss limitation and the $3K stcg carry forward that keeps your books in line.

Enlightening discussion though, please continue b/c I think it's interesting how it's so interwoven with the issue at the root of the thread.

Trying to keep it that way. I meant tax policy regarding stocks and dividends not changing for retail investors, i.e. Bush/Obama tax cuts. I understand your points on CEO and insider compensation, but they weren't the focus of my argument as they represent less than 1% of the population and frankly our tax code is disgusting. My whole point was that you could invest $600 in VZ to pay those fees. That's a pretty paltry sum, and even if you feel as though that wouldn't do it, why not $1000, but others are acting as if I'm telling people to put their entire life savings into a stock to pay a fee. We're talking about the amount of money it costs to buy an unsubsidized phone.
 
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dmmarck

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Trying to keep it that way. I meant tax policy regarding stocks and dividends not changing for retail investors, i.e. Bush/Obama tax cuts. I understand your points on CEO and insider compensation, but they weren't the focus of my argument as they represent less than 1% of the population and frankly our tax code is disgusting. My whole point was that you could invest $600 in VZ to pay those fees. That's a pretty paltry sum, and even if you feel as though that wouldn't do it, why not $1000, but others are acting as if I'm telling people to put their entire life savings into a stock to pay a fee. We're talking about the amount of money it costs to buy an unsubsidized phone.

Oh I completely get that. Just like the tax rules I referenced, they're only applicable to a very small minority of people.

Regarding dividends, you're right, generally you have qualified rates or not. The issue that I wanted to disagree with (and do) is that it's that simple. In most practical situations it absolutely is, but the problem with our tax code is taking a term that you use--dividend--and giving it a very specific definition within a very specific subpart of Sub C. It means that while you can "get" a dividend, it may not "be" a dividend for tax purposes depending on the year end status of the corporation.

It's confusing, murky, and it sucks, which is part of the reason why corporate tax reforms are called for every other week. But the reality of it remains--without current (meaning the tax year the distribution is made) or accumulated earnings and profits, what is "effectively" a dividend becomes something else entirely for tax purposes.

Also, I have the rates changes in one of my outlines. One thing Obama proposed was a 39.6% rate for dividends (starting in 2013), which is obviously catastrophic for some. But all that means is shifting (for tax purposes) what gets distributed, when, and the form in which it's distributed. Regardless, that jump is very, very big lol
 

bworley50

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Oh I completely get that. Just like the tax rules I referenced, they're only applicable to a very small minority of people.

Regarding dividends, you're right, generally you have qualified rates or not. The issue that I wanted to disagree with (and do) is that it's that simple. In most practical situations it absolutely is, but the problem with our tax code is taking a term that you use--dividend--and giving it a very specific definition within a very specific subpart of Sub C. It means that while you can "get" a dividend, it may not "be" a dividend for tax purposes depending on the year end status of the corporation.

It's confusing, murky, and it sucks, which is part of the reason why corporate tax reforms are called for every other week. But the reality of it remains--without current (meaning the tax year the distribution is made) or accumulated earnings and profits, what is "effectively" a dividend becomes something else entirely for tax purposes.

Also, I have the rates changes in one of my outlines. One thing Obama proposed was a 39.6% rate for dividends (starting in 2013), which is obviously catastrophic for some. But all that means is shifting (for tax purposes) what gets distributed, when, and the form in which it's distributed. Regardless, that jump is very, very big lol

I think, that for the specific purpose of my recommendation, it is that simple. Please don't get me started on Barak Obama. I will refrain from doing so, most likely.
 

dmmarck

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I think, that for the specific purpose of my recommendation, it is that simple. Please don't get me started on Barak Obama. I will refrain from doing so, most likely.

It absolutely might be. I'm sure VZ has more than enough e&p to make sure any dividend paid qualifies under 301. Some companies don't have that though, and thus dividends become risky business for companies and their shareholders (at least from a corp tax perspective).
 

Johnly

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I have said to you on multiple occasions that the dividends are not guaranteed. I also tell that to my clients.
You have said it twice in post 56 and 60. I had you at 56Tax policy is an overrated concern.
Why? I do my own taxes and work for myself every year, I will keep from being sheep thank you, stay concerned, and watch those yearly adjustments. Would you tell your boss you don't want a raise because you'd have to pay more in taxes? Remember, every dime of money you pay to Verizon is with after tax dollars. Tax policy doesn't change every year. The tax policy we have right now regarding stocks and dividends has been the same since 2004.
You meant law lol! Like I say, I do my own taxes and the entitlement adjustments change often It may change, but has very little to do with stock recommendations. Example: If I have a client who is living on social security and needs more income and they own Verizon or Philip Morris, should I tell them to sell it just because it is possible they may pay more in taxes?
You win money, you pay taxes, you make money, you pay taxes, you buy something, you pay taxes. I know what I paid last year in taxes do you? About a third of your earnings Quite the contrary, because any stock that pays a higher dividend needed to offset the tax burden will inherently carry more risk. When I see a fee like this being imposed, it only makes me want to buy the stock more. Hedge funds own approximately 7% of the shares.
Actually hedge funds are far less, but far more powerful. The 2008 tax crises changed that some. Try over two trillion and less than 2% The media has you brainwashed.
That is saying I am brainwashed, stop please and stay on topic. Say the media has the masses brainwashed or something to that effect, keep it civil. The majority of the owners in stocks like VZ and VZ specifically are mutual funds and ETFs, which in turn are owned by those people who own those funds. Stock prices and the dividends are a result of earnings (current and future), cash flow, assets and debt levels, the overall economy, and political events. I'm not trying to be rude, but if you like guarantees, just keep your money in a checking account, where currently you are losing money, yes losing money.Thank you, but do you know why I can play all day? I know the best way to double my money is to fold it in half and put it in my pocket. SO what do you do? Why are you so qualified on this manner? I admit, I am just an amateur when it comes to this stuff. Can I ask you where you attained your degree? I amuse a masters or PHD?
Again, I freely admit I am not an expert here, though I do attend college on a regular basis.
 

bworley50

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Sorry. Not trying to be rude. Search Brandon Worley on Linkedin. I am self employed as well. I'm not sure if the comment about folding your money in half was a joke or not.
 

Johnly

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Sorry. Not trying to be rude. Search Brandon Worley on Linkedin. I am self employed as well. I'm not sure if the comment about folding your money in half was a joke or not.

It is better to play other peoples money for a dividend. That my friend is guaranteed because it is strait off the top. Never needed LinkedIn, however I respect you fully for your input my friend. I am a lowly wolf, and the fee sucks!
 

dmmarck

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Sorry. Not trying to be rude. Search Brandon Worley on Linkedin. I am self employed as well. I'm not sure if the comment about folding your money in half was a joke or not.

Self employed? You need/want/have room for a tax attorney?

I keed I keed ;)
 

bworley50

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It is better to play other peoples money for a dividend. That my friend is guaranteed because it is strait off the top. Never needed LinkedIn, however I respect you fully for your input my friend. I am a lowly wolf, and the fee sucks!

Sorry I didn't understand this post. Other peoples money? Strait off the top?
 

Johnly

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Sorry I didn't understand this post. Other peoples money? Strait off the top?

One more thing, I checked your profile. Much respect and well done. Sounds like you know your stuff! I just don't get why all you smart people with the wealth of knowledge you two have go into broking the market? Why not hit it from the top and set your own salary? You and dmmarck know your stuff. That is what I mean my playing other peoples money, if you are that good, go make a fortune! Anyway, I give credit where it is due.
 

bworley50

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It not everything
One more thing, I checked your profile. Much respect and well done. Sounds like you know your stuff! I just don't get why all you smart people with the wealth of knowledge you two have go into broking the market? Why not hit it from the top and set your own salary? You and dmmarck know your stuff. That is what I mean my playing other peoples money, if you are that good, go make a fortune! Anyway, I give credit where it is due.

Need income and capital first to invest. I know a lot from experience, but not everything. The majority of my clients pay as they go. You're right, if I knew everything it would be foolish to do it for a living, but no one does, unless they're cheating. It is an art and a science. Sometimes even when everything says x, the market says y. Not because of anything nefarious, but things happen. BP oil spill, Carnival cruise ship crashing are a few examples.
 

anon(394005)

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Wow, this thread got off topic! :p Not to justify the fee, but check this out that explains in detail the reasons behind the fee (not that it makes a whole lot of sense): Verizon introduces smartphone upgrade fee- MSN Money

A few excerpts:

"Smartphone subsidies forcing Verizon's hand

Saturation in the voice industry and the rise of data services has caused smartphones to increasingly figure into wireless carriers' plans. The lure of the high data ARPU generating smartphone customer has also led the wireless industry to heavily subsidize these smartphones in order to drive their sales. For example, a basic iPhone 4S model costs around $650 for the carriers who then subsidize it heavily to sell for $199."

"Verizon's latest move shows that the company is starting to feel the heat of its huge subsidies. This is an attempt to increase the upgrade cycle of smartphones so as to lessen the impact of subsidies."
 

pauldroidr2d2

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Wow, this thread got off topic! :p Not to justify the fee, but check this out that explains in detail the reasons behind the fee (not that it makes a whole lot of sense): Verizon introduces smartphone upgrade fee- MSN Money

A few excerpts:

"Smartphone subsidies forcing Verizon's hand

Saturation in the voice industry and the rise of data services has caused smartphones to increasingly figure into wireless carriers' plans. The lure of the high data ARPU generating smartphone customer has also led the wireless industry to heavily subsidize these smartphones in order to drive their sales. For example, a basic iPhone 4S model costs around $650 for the carriers who then subsidize it heavily to sell for $199."

"Verizon's latest move shows that the company is starting to feel the heat of its huge subsidies. This is an attempt to increase the upgrade cycle of smartphones so as to lessen the impact of subsidies."

I wonder if this will make Motorola slow down its release of new phones.
 

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