Stock Dividends

You get a stock dividend when a company pays you a dividend with extra shares of stock instead of cash. You usually don’t need to include these dividends in your taxable income.

When you receive a dividend, the total value (basis) of the stock doesn’t change. Instead, the basis of each share changes.

Stock dividends usually don’t have tax implications until you sell the shares. So, the amount paid in cash for the fractional share is considered taxable income. Report the sale of fractional shares on Form 8949.

To learn more, see the Fractional Shares tax tip.

Related Topics

Related Resources

What Is Cryptocurrency? | H&R Block

What is Cryptocurrency? Bitcoin, Litecoin, and the like leave many wondering how to classify this new form of investment. Find the answer at H&R Block.

Bitcoin, Taxes, and the Modern Entrepreneur | H&R Block

Many entrepreneurs find themselves wondering exactly how Bitcoin is taxed. Our H&R Block Tax Pros are prepared to assist self-employed filers with Bitcoin taxation.

How To Offset Capital Gains | H&R Block

Understanding how to offset capital gains is a topic that many tax filers avoid. Brush up on key terms and the process with advice from H&R Block tax pros.

The IRS, Bitcoin, and Other Virtual Currencies | H&R Block

Have you found yourself wondering how the IRS classifies Bitcoin? Our tax pros discuss relevant IRS Bitcoin law and notices. Learn more with H&R Block.