2012 Tax Treatment for Dividends
MarketAxess paid an aggregate of $0.44 per share in quarterly dividends on its common stock during 2012 and a special cash dividend of $1.30 per share in December 2012. For United States federal income tax-reporting purposes, the Company reported 49% of the 2012 dividends as a distribution in excess of the Company's earnings and profits.
Distributions in excess of earnings and profits are generally treated as a return of capital to the extent of a stockholder’s basis in his or her shares. Accordingly, these non-taxable distributions reduce that tax basis. Once a stockholder’s basis is reduced to zero, these distributions generally will be taxed as capital gains.
While the above information includes general statements about the tax classification of dividends paid on MarketAxess common stock, these statements do not constitute tax advice. The taxation of corporate distributions can be complex, and stockholders are encouraged to consult their own tax advisers to determine what impact the above information may have on their specific tax situation.
IRS Form 8937
This form has been made available pursuant to Treasury Regulations and IRS guidance.