HOME Gerald Kramer The AZ CPA 5350 N 16th St Phoenix, AZ 85016 (602) 264-9331 Fax: (602) 279-1766 Investments are the first area in which tax planning can result in tax savings. Dividends: The top rate on dividends has been reduced to 15% but not on all dividends. Common stocks must be held more than 60 days for ordinary dividends and over one year for capital gains. Not all dividends qualify for this beneficial treatment. These include most dividends paid on preferred stocks and by Real Estate investments trusts. Interest and short term capital gains earned from mutual funds will also be excluded. All distributions from IRAs, 401(k) plans and other deferred compensation plans will be taxed at normal rates and are not subject to the maximum tax cap rate.