 Alright, so line 3A, Qualified Dividends. Enter your total Qualified Dividends online. 3A Qualified Dividends are also included in the ordinary dividend total required to be shown online. 3B, Qualified Dividends are eligible for a lower tax rate than other ordinary income. So it's a lower tax rate. And again, when you say, okay, it's a lower tax rate, we can look at what that tax rate is. But remember, when you calculated in tax software, you're usually dependent upon the software to do the calculation. So you're not actually going to, you might not see how it applied the tax tables and then this lower rate. So you have to be able to kind of intuitively understand it, possibly recalculate it with our Excel worksheet. We'll take a look at that in our example problem in a following presentation. So generally, these dividends are shown in box 1B of Forms 1099-DIV. See publication 550 for the definition of Qualified Dividends if you receive dividends not reported on Forms 1099-DIV. Exception, some dividends may be reported as Qualified Dividends in box 1B of Forms 1099-DIV, but aren't Qualified Dividends. These include dividends you received as a nominee, C Schedule B instructions to look at a situation similar to that when we saw it for the interest, similar kind of scenario. Dividends you received on any share of stock that you held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock isn't entitled to receive the next dividend payment. When continuing the number of days you held the stock, when counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired a very tall stepladder. See the examples that follow. Also, when counting the number of days you held the stock, you can't count certain days during which your risk of loss was diminished. See publication 550 for more details. So usually you'd be OK to report what's on the Form 1099 div, but if you're like a day trader type of situation, it's likely that you might have some of these situations where you're buying and selling stocks on a shorter time frame, which means you could run into situations or problems. So dividends attributable to periods totaling more than 366 days that you received on any share of preferred stock held for less than 91 days during the 181 day period that began 90 days before the extended the extended the X dividend date. When counting the number of days you held the stock, you can't count certain days during which your risk of loss was diminished. You can see publication 550 for more details there. So dividends on any share of stock to the extent that you are under an obligation, but rather an obligation in including a short sale to make related payments with respect to positions in substantially similar property payments and lieu of dividends. But only if you knew or have reason to know that the payments aren't qualified dividends dividends from a corporation that first became a surrogate being surrogate fathered or boys lost his own foreign corporation after December 22nd, 2017, other than a foreign corporation that is treated as a domestic corporation under section 7874B. So again, those are a little outside what the norm of normal day-to-day investors on the long term perspective would be. Let's look at an example. You bought 5000 shares of XYZ corp corporation common stock on July 8th, 2022. XYZ corporation paid a cash dividend of 10 cents per share. So notice how the dividends basically work. You can't like it's not like a partnership where the corporation can just pay off certain owners of the of the partnership according to the partnership agreement or to the draws of a particular partner. They have to agree to pay all shareholders the same amount, each share the same amount. People will still get paid different amounts depending on how many shares they own. So if you own more shares, then you're going to get paid more because they're going to be paying out on a per share basis. So the X dividend date was July 16th, 2022. Your form 1099DIV from XYZ corporation shows $500 in box 1A ordinary dividends and in box 1B qualified dividends. However, you sold 5000 shares on August 11th, 2022. You held your shares of XYZ corporation for only 34 days. So again, this is why it's a little bit unusual for normal investors that aren't doing like day-to-day kind of trading because it's unlikely that you're going to hold a stock for such a short timeframe for most people. So only 34 days of 121 day period from July 9th, 2022 through August 11th, 2022. The 121 day period began on May 17th, 2022, 60 days before the X dividend date and the end and ended on September 14th, 2022. You have no qualified dividends from XYZ corporation because you held the XYZ stock for less than 61 days. Let's do another example, example number two. The facts are the same in example one except that you bought the stock on July 15th, 2022, the day before the X dividend date and you sold the stock on September 16th, 2022. You held the stock for 63 days from July 16th, 2022 through September 16th, 2022. The $500 of qualified dividends shown in box one B of form 1099 div are all qualified dividends because you held the stock for 61 days of the 121 day period from July 16th, 2022 through September 14th, 2022. Just clear as day, obviously. So example three. You bought 10,000 shares of ABC Mutual Fund Common Stock. I just want to point out again, again, most people are investing in mutual funds oftentimes often under the umbrella of like an IRA or a 401K plant. So you're probably not going to run into these scenarios again unless you're purchasing like individual stocks and buying and selling them on the short term. So you bought 10,000 shares of ABC Mutual Fund Common Stock on July 8th, 2022. ABC Mutual Fund paid cash dividend of 10 cents per since a share. The X dividend date was July 16th, 2022. The ABC Mutual Fund advises you that the part of the dividend eligible to be treated as qualified dividends equals two cents a share. Your form 1099 div from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. However, you sold the 10,000 shares on August 11th, 2022. You have no qualified dividends from ABC Mutual Fund because you held ABC Mutual Fund stock for less than 61 days. Tip. Use the qualified dividends in capital gain tax worksheet or the Schedule D tax worksheet, whichever applies to figure your tax. See the instructions for line 16 for details.