VHI

Are there any tax implications for investors holding Valhi shares through the ex‑dividend date?

Created August 07, 2025 at 08:17 PM

Yes – receiving the $0.08 per‑share quarterly dividend from Valhi (ticker VHI) creates a tax event for the shareholder who is still on record on the ex‑dividend date. Below is a step‑by‑step look at what that means for investors, based on the information in the press release.

1. Timeline of the dividend

Date	What happens
September 5 2025 – Record date	The company will determine who is entitled to the dividend. Only shareholders registered in the company’s books at the close of business on this date receive the payment.
September 4 2025 (or the preceding business day) – Ex‑dividend date	The stock trades without the right to receive the dividend. If you sell the shares before the close of business on the ex‑date, you will not get the dividend. If you still own the shares through the ex‑date (i.e., you are a holder at the close of business on that day), you will receive the dividend on September 25.
September 25 2025 – Payment date	The cash dividend is actually paid to the eligible shareholders.

Bottom line: To be eligible, you must hold the shares at the close of business on the ex‑dividend date (Sept 4 2025).

2. How the dividend is taxed in the United States

Tax concept	What it means for this $0.08 dividend
Ordinary (non‑qualified) dividend	If the dividend does not meet the “qualified‑dividend” criteria, it is taxed at your regular marginal income‑tax rate.
Qualified dividend	If the dividend meets the qualified‑dividend rules (generally: the stock was held for more than 60 days during the 121‑day period that begins 60 days before the ex‑date), it is taxed at the lower qualified‑dividend rates (0 %, 10 %, or 15 % for most taxpayers).
Form 1099‑DIV	The $0.08 per share will be reported on the 2025 Form 1099‑DIV you receive from your broker in early 2026. You must include it on your 2025 tax return (Form 1040, Schedule B).
Net Investment Income Tax (NIIT)	If your modified adjusted gross income (MAGI) exceeds $200,000 (single) or $250,000 (married filing jointly), the dividend is subject to the 3.8 % NIIT on the portion of net investment income that exceeds those thresholds.
State and local taxes	Most states treat dividend income the same way as the federal treatment, so expect state income‑tax on the dividend as well (unless you live in a state with no income tax).
Withholding for non‑U.S. investors	Non‑resident investors are subject to 30 % withholding (or a reduced treaty rate) on the dividend unless they file a proper Form W‑8BEN to claim treaty benefits.

3. Interaction with your cost basis and capital‑gain calculations

Cost basis is unchanged. The cash dividend does not adjust the basis of the VHI shares you own.
Capital‑gain timing – When you later sell the shares, the gain or loss is calculated on the difference between the sale price and the original purchase price (your basis). The dividend you received does not affect that calculation.
Dividend‑capture strategy – Some investors buy just before the ex‑date and sell shortly after the dividend is paid, hoping to pocket the cash. Because the share price typically drops by roughly the dividend amount on the ex‑date, the net economic benefit is usually negligible, and the extra tax reporting (and possible short‑term capital‑gain tax) often erodes any gain.

4. Practical steps for investors who hold through the ex‑dividend date

Confirm you are still a shareholder on Sept 4 2025 (ex‑date).
- If you own the shares in a brokerage account, the broker will automatically keep you on record unless you sell before the ex‑date.
Expect a cash credit on Sept 25 2025.
- The dividend will be deposited into your cash or dividend‑reinvestment account.
  3 Record the dividend for tax purposes.
- Your broker will issue a 2025 Form 1099‑DIV (usually in February 2026).
- When filing your 2025 tax return, report the dividend on Schedule B.
Determine if it is qualified.
- Check the “holding period” rule: you must have held the VHI shares for more than 60 days during the 121‑day window that starts 60 days before the ex‑date. If you meet this, the dividend can be taxed at the qualified‑dividend rates.
Plan for any state tax or NIIT impact.
- Add the dividend to your state taxable income.
- If your MAGI is high enough, calculate the 3.8 % NIIT on the dividend (and other net investment income).

5. Summary of the tax implications

Implication	Who is affected	What you need to do
Dividend is taxable income	All U.S. shareholders who hold VHI through the ex‑date	Report on 2025 Form 1040, Schedule B; determine qualified vs. non‑qualified status.
Potential qualified‑dividend rate	If you held the shares >60 days in the required window	May qualify for the lower 0/10/15 % rates; keep records of purchase dates.
NIIT (3.8 %)	High‑income taxpayers (MAGI > $200k single, > $250k MFJ)	Include dividend in net investment income calculation.
State tax	Residents of states with income tax	Add dividend to state taxable income.
Withholding for non‑U.S. investors	Non‑resident shareholders	Expect 30 % (or treaty‑reduced) withholding; file Form W‑8BEN if needed.
Capital‑gain impact	When you later sell the shares	No change to cost basis; dividend does not affect gain/loss calculation.

Bottom line

If you own Valhi (VHI) shares on the ex‑dividend date (Sept 4 2025), you will receive an $0.08 per‑share cash dividend on Sept 25 2025. That dividend is taxable in the year 2025, must be reported on your federal (and likely state) tax return, and may be subject to ordinary income tax, qualified‑dividend tax rates, the Net Investment Income Tax, and, for non‑U.S. investors, withholding. The dividend does not alter your share’s cost basis, but it does create a reporting requirement and a potential tax liability that you should plan for when filing your 2025 tax return.