This article appears courtesy of DailyII.com
A good old yield play
By Eric Uhlfelder
09/12/06
Many investors have been focusing on the recent extension of the 2003 tax act, which will keep taxes on capital gains and qualified dividends at the reduced rate of 15 percent through 2010. But an obscure corner of the infrequently visited arena of preferred stocks offers corporate and institutional investors an even better deal than common stocks.
Dividend received deduction, or DRD, preferred stocks allow qualified investors to avoid paying taxes on 70 percent of their dividends.
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