This is just in case others were unclear as to the status of the dividends paid by Triton International (TRTN) on their preferred stock. The prospectus on the issues have always been unclear as to whether they pay qualified dividends or not.
ALL DIVIDENDS PAID ON THEIR PREFERREDS THUS FAR ARE ‘RETURN OF CAPITAL’.
Data on the status of the various dividends can be found here.
As most of you probably know when a dividend is designated as ‘return of capital’ it reduces your cost basis of the shares.
If you pay $25 for a share and receive $2 in return of capital distributions your cost basis in now $23. If you sell it for $25 you will have a $2/share gain since your cost basis had been reduced to $23 through receipt of a return of capital distribution.
The return of capital is not taxable – but upon the sale of the shares you may have a capital gain (or loss) and you will need to then pay taxes (if in a taxable account).