Question

What is the federal tax treatment of ordinary dividends?

Ordinary dividends are taxed:
As a capital gain distribution.
As long-term capital gains.
As ordinary income.
The same as qualified dividends.

Answer 1

As ordinary income.

Explanation: "Ordinary dividends" (nonqualified dividends) are taxed at your regular federal income tax rates. Qualified dividends, by contrast, are taxed at the lower long-term capital gains rates; capital gain distributions are reported and taxed as capital gains.