IRVINE, Calif., Feb. 2 /PRNewswire-FirstCall/ -- ECC Capital Corporation , a mortgage finance real estate investment trust that originates and invests in residential mortgage loans, today announced the tax treatment for its 2006 dividend distribution.
Dividend Tax Treatment
The following dividend table provides detail related to the one taxable dividend that is reportable for ECC Capital stockholders for the 2006 tax year:
Long Term
Declaration Record Payment Total Ordinary Return of Capital
Date Date Date Distribution Income Capital Gains
12/22/06 12/29/06 01/29/07 $0.24 $0.24 $0.00 $0.00
Total $0.24 $0.24 $0.00 $0.00
No portion of the dividends constitutes "qualified dividends" eligible for the reduced rates on dividends pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Excess Inclusion Income
For stockholders that are tax-exempt or non-U.S. corporations or residents, you may be required to report a portion of ECC Capital's dividend to the IRS as "Excess Inclusion Income."
- Tax-exempt stockholders will be subject to unrelated business taxable income (commonly referred to as UBTI) with respect to such excess inclusion income;
- Non-U.S. stockholders will be subject to the 30 percent U.S. federal withholding tax on this income without reduction under any otherwise applicable income tax treaty; and
- U.S. stockholders, including taxpaying entities, will not be able to offset such excess inclusion income with net operating losses.
ECC Capital will provide the amount of Excess Inclusion Income per share on ECC Capital's Web site at http://www.ecccapital.com/ when this information is available.
Tax Disclaimer
The information contained in this release should not be considered tax advice. You should consult a tax advisor regarding the specific federal, state, local, foreign and other tax consequences to you regarding your ownership of shares of ECC Capital's common stock.
About ECC Capital Corporation
ECC Capital Corporation, headquartered in Irvine, Calif., is a mortgage real estate investment trust (REIT) that originates and invests in residential mortgage loans. Primarily through its wholesale subsidiary, ECC Capital offers a series of mortgage products to borrowers, with a particular emphasis on "nonconforming" borrowers who generally do not satisfy the credit, collateral, documentation or other standards required by conventional mortgage lenders and loan buyers. ECC Capital is currently structured to qualify as a REIT by managing a portfolio of nonconforming loans it originates or acquires. As a REIT, ECC Capital is required to distribute dividends to its stockholders from net income generated from the spread between the interest income on its assets in its portfolio and the costs of capital to finance its acquisition of these assets.
For Further Information:
AT THE COMPANY:
Roque A. Santi
Chief Financial Officer
(949) 856-7611
