Dividend Reinvestment
When you open a mutual-fund account, you can receive dividends as cash or have them reinvested. You can also do this with stocks in either of these:
- Dividend-reinvestment program
- Employee stock-purchase plan
Most people reinvest their dividends, which buys more shares. However, when you buy shares through reinvestment, it’s like you received the cash and immediately bought more shares. You must keep track of the basis of each share when you buy them — whether directly or through reinvestment.
Related Resources
Learn more about the myRA retirement planning account by the U.S Treasury Department from the tax experts at H&R Block.
How does the sale of business property affect your taxes? Learn about property classifications and get tax answers at H&R Block.
Learn more about interest income and whether is qualifies as taxable or tax exempt interest income from the tax experts at H&R Block.
What should you know before you calculate the cost basis of stocks for tax purposes? Learn more from the tax experts at H&R Block.
