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Costco Plans $3B Special Dividend To Escape Anticipated Tax Hike

Costco Wholesale, the warehouse merchant, announced Wednesday that it will pay a special $3 billion dividend before year's end, saving shareholders from a big bite should taxes rise due to the fiscal cliff.

The company said the $7-a-share payment is possible due to its strong balance sheet and its good access to capital. The payment will be in addition to the regular 27.5 cent a share dividend that will be paid on Nov. 30.

The special dividend will be paid Dec. 18 to shareholders of record on Dec. 10. That will allow investors to pay the lower 15% tax rate currently in effect on dividends. With taxes set to rise on Jan. 1 as part of the fiscal cliff, the rate paid on the dividend could more than double for many high income taxpayers.

Source: CNN. Read full article. (link)

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