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Originally Posted by Art G
I read long ago that brokerages can still lend out stock, even if it's not a margin account.
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I don't think this is correct. After the 2003 tax cuts on dividends, I moved all my dividend paying stocks from my margin account to my cash account, to be sure I would get the 15% rate. It is my understanding that if the stock is "on loan" when it goes ex-dividend, it may not qualify for the favorable rate, since the short seller, and not the corporation, would be paying me the dividend. For this reason (among others), I would think brokers wouldn't be lending stocks held in cash accounts.
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