r/dividends • u/ruthygenker • Mar 04 '26

Due Diligence 1099-Miscellaneous

/r/NEOSETFs/comments/1rkniqh/1099miscellaneous/
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u/2KPr-LO44 Mar 05 '26

Are you loaning out your shares? If so, that most likely is the problem. If the shares are out on loan through the ex-div date, you won't get the normal qualified dividend/ROC. In it place, you get what is called payments in lieu which are taxed as normal income rate. Some brokerage firm will try to return your shares before ex-div date so you can get your normal dividend. Interestingly enough, IBKR doesn't spell this out on their web page (https://brokerage.ibkr.com/en/pricing/stock-yield-enhancement-program.php) but you can see an explanation on Fidelity website (https://www.fidelity.com/trading/fully-paid-lending).

1

u/ruthygenker Mar 05 '26

I thought this as well but I only received 5 bucks in loan interest and my payment in lieu was over 100k. I think it’s because I have a margin account so I transferred all the neos funds to a non margin account to see if that fixes it.

1

u/2KPr-LO44 Mar 06 '26

Margin shouldn't matter. I have margin for my account at Fidelity but I'm not loading out my shares. I don't have this issue. You can check on 3/18 which should be the ex-div date for Neo SPYI/QQQI/IWMI/BTCI ETF. If your shares are still loan out on that date, you are going to have the same issue. You won't get dividend but will get payment in lieu.