### Question
How is the term qualified preferred dividend defined?


### Answer
The term **qualified preferred dividend** is defined in *26 U.S.C. § 1059* as the following:

> any fixed dividend payable with respect to any share of stock which—



(I) provides for fixed preferred dividends payable not less frequently than annually, and



(II) is not in arrears as to dividends at the time the taxpayer acquires the stock

#### Citation:
  - *26 U.S.C. § 1059*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter O-Gain or Loss on Disposition of Property > PART IV-SPECIAL RULES**

