Part 4/8:
Now that we understand how to find and interpret dividend tax treatment, let’s explore various investment options that deliver high dividends with favorable tax implications:
Covered Call Funds
Covered Call Funds are one of the most appealing investment types for generating tax-efficient income. These funds utilize options strategies that can lead to dividends being categorized more favorably for tax purposes. Notable examples include funds managed by NEOS, which are actively managed to harness tax-loss harvesting opportunities. Their option contracts fall under Section 1256, allowing them to benefit from lower 60/40 tax rates.