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    catonsville's Avatar
    catonsville Posts: 894, Reputation: 91
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    #1

    Nov 17, 2011, 05:44 PM
    Stock Related Question
    When you see for example: Portugal Telecom SGPS (ADR) (Public, NYSE:PT)
    What does ADR stand for? It says that: Currency in USD. What is the Tax on
    A foreign dividend stock?
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #2

    Nov 17, 2011, 06:16 PM

    ADR is a stock that trades in the United States but represents a specified number of shares in a foreign corporation. ADRs are bought and sold on American markets just like regular stocks, and are issued/sponsored in the U.S. by a bank or brokerage. Taxes are paid as US income.
    catonsville's Avatar
    catonsville Posts: 894, Reputation: 91
    Senior Member
    		  
    #3

    Nov 17, 2011, 06:26 PM
    Very Good, you are essentually saying that there is no down side to purchasing these Foreign Stocks as long as they are paying in US Currency? Dividends are taxed just like US stock dividends?
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #4

    Nov 17, 2011, 06:38 PM
    Not quite. The foreign company will not directly pay you, the bank or brokerage that holds the ADR's will pay and since they are in the US, the dividends are taxed like a US corp. Many of the mutual funds I own contain ADR's. "No down side"? There are always up and downsides in stock ownership. Look at the market the past 2 days.
    catonsville's Avatar
    catonsville Posts: 894, Reputation: 91
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    #5

    Nov 17, 2011, 06:59 PM
    Thanks. I might look into purchasing ADR's.
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