4.3 Dividends From a Partnership, S Corporation, Estate, or Trust
Dividends you receive as a member of a partnership, stockholder in an S corporation, or as a beneficiary of an estate or trust may be qualified dividends eligible for the reduced tax rate of zero or 15% (4.2).
A distribution from a partnership or S corporation is reported as a dividend only if it is portfolio income derived from nonbusiness activities. Your allowable share of the dividend will be shown on the Schedule K-1 you receive from the partnership or S corporation.
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