Jester,

One of the great things about being your friend is that often you have obscure IRS information in your head, and barring that, can find it, quote chapter and verse, and interpret it without going blind. The downside is that you're almost always correct, and from what you quoted, I don't see a way around that tax hit on dividends, even if the company has a DRIP program. And it is true to IRS dogma - heads I win, tails you lose. Very, very few cases I can recall where the investor benefits - such as the 15% (now 20% - thank you, Obama) tax on LT cap gains. I will try to check with another brokerage than my present one, if somehow by chance the brokerage makes a difference on taxability. But the point is probably moot. I'd love to hear from lt cap about his experience, since he was the one to speak about the idea.

Come to think of it, when I spoke with my regular brokerage yesterday, they were somewhat foggy on how such dividends would be treated. Ought to put you on the payroll.