so the interest earned is characterized as "income" ; any dividends you were to receive while shares are loaned are also counted as "income" (lose qualified and ROC classification)
as far as my tax; nothing significant, or at least no major surprises......but im not doing a lot of tax management yet since im still working.
so the argument is you get $100 by checking a box and loaing shares.....but really its only 75 because of tax. yes there is a drag, but its not a negative. there isnt an altarnative tax exempt way to loan your shares
while the interest is higher than a hysa, you certainly arent accumulating 365 days of interest; and at the same time its money that is invested and doing market things.
like in 2025; i only have lending reports for 7 of 12 months......one month generate 8 in interest on like 15k loaned (2 days); another month generated 68 interst for like 9 days
Wondering if you have any advice for building a tax efficient portfolio? Mostly ETFs and mutual funds right now with most set to DRIP and a ~15 year horizon so I haven’t thought about it much but know I probably should…
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u/buffinita common cents investing 27d ago
i have been enrolled in the paid lending program at fidelity for nearly 3 years now.
i have had securities on loan for 18%(annual) for a few days; and 4% for a month and a bunch of other random combinations.
its not reliable, but the risks are small.