Return of capital (ROC) refers to payments back to "capital owners" (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business.
Return of capital
A cash distribution resulting from the sale of a capital asset, or securities, or tax breaks from depreciation.
Return of Capital information is being submitted for the year in the Capital Gains Distribution field.
D
To be used on any day that a mutual fund's net asset value is reduced by a capital gains distribution.
May include dividends from earnings, capital gains from sale of portfolio holdings and return of capital. Fund distributions can be made by check or by investing in additional shares.
Footnote C Capital gains figure includes return of capital.
Footnote D To be used on any day that a mutual fund's net asset value is reduced by a capital gains distribution.
This is because the government considers the payout to be a return of capital. Only the percentage of the money considered earnings is taxable. If you receive your immediate annuity within a company pension, it is fully taxable.
Meaning alot of the dividend is return of capital. Waste Management, well while I might add to a watch list, I'm not too sure about it. Just sort of makes me wonder too much. Pitney Bows however is something to really consider. But good article.
In some instances, they often distribute more than current earnings. If a REIT distributes more than its taxable income, the excess distribution is considered "return of capital.
Cash dividend
A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.
Thus, the closed-end fund may reduce or suspend the dividend, or replace a portion of the distribution with return of capital at another point in time.
The issuer promises to pay the holder at maturity the face amount of the certificate, which is the return of capital plus accrued interest. Investors may also be able to get a surrender value if the certificate is presented prior to maturity.
Return of Capital A distribution of cash resulting from depreciation tax savings, the sale of a capital asset or of securities in a portfolio, or any other transaction unrelated to retained earnings.
These are traded in the wholesale market, but are often used as the basis of guaranteed equity products, which offer retail buyers a participation if the equity index rises over time, but which provides guaranteed return of capital if the index ...
a smaller capital loss will result at the time the security is sold. A capital dividend is somewhat akin to tearing boards off a house to use as firewood. If the process goes on too long, the house itself will be gone. Also called return of capital.
 See also: Return, Capital, Stock, Investment, Share
  
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