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.
Learn more about reporting LLC losses with advice from the tax experts at H&R Block.
Learn more about capital gains tax on real estate with advice from the tax experts at H&R Block.
How should you use form 1099-PATR to report a patronage dividend? Learn more from the tax experts at H&R Block.
Should you count supplemental security income as taxable income? Learn more from the tax experts at H&R Block.