Special tax considerations for EFR?

MarylandX · Post by **MarylandX** » Sun Jun 26, 2011 10:34 pm

I am considering investing in the Eaton Vance Senior Floating Rate Trust (EFR). This was recently recommended because of its high yield.
My question is are the dividends taxed the same as other dividends? I know some investments like REITs and MLPs the dividend are taxed differently.
Thanks

Chris · Post by **Chris** » Mon Jun 27, 2011 7:01 pm

"The final determination of tax characteristics of each Fund’s distributions will occur after the end of the year, at which time it will be reported to the shareholders."
So it's not exactly pinned down yet, but their annual report does say that they issue a 1099-DIV at year end. I would expect the monthly distributions to be qualified or non-qualified dividends, plus the possibility of some capital gains at year end.

Post by **jacob** » Mon Jun 27, 2011 7:13 pm

It's a fixed income closed-end fund which likely means non-qualified dividends (which are taxed like interest income). You may also see some return of capital which needs to be tracked year after year after year so you can adjust your cost-basis when the stocks are eventually sold.

MarylandX · Post by **MarylandX** » Sat Jun 16, 2012 4:44 pm

I do not understand this investment. I like the return but not sure about taxes or paperwork.

OTCW · Post by **OTCW** » Sat Jun 16, 2012 6:25 pm

Best to keep something like that in an IRA imo. Withdrawals are taxed as ordinary income when the time comes. Saves a whole lot of paperwork headache.