New Money Preferred

New Money Preferred - New Money Preferred is preferred stock, issued after October 1, 1942, when the tax exclusion for corporate investors receiving preferred stock dividends raised from sixty percent to eighty five percent to equal the exclusion on common stock dividends. The change benefited financial institutions, such as insurance companies, which are limited in the amount of common stocks they can hold, typically five percent of assets. New money preferred offer an opportunity to gain tax advantages to bond investments, which have fully taxable interest. The corporate tax exclusion on dividends is currently seventy percent. Certain tax breaks go out to corporate investors.