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March 25, 2024
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I reinvested my dividends but I was sent a 1099-DIV. Am I required to pay tax on the dividends this year or can I pay the tax when I sell the stock?

  • March 25, 2024
  • 1 reply
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Best answer by VolvoGirl

Yes you have to pay tax on it.  Doesn't matter what you did with the Dividends.   It is really 2 transactions,  you got a Dividend then you bought more shares.  Just like if they sent you a check and then you bought more shares. So be sure to add it to your cost basis when you sell the shares.

1 reply

VolvoGirl
VolvoGirlAnswer
Employee
March 25, 2024

Yes you have to pay tax on it.  Doesn't matter what you did with the Dividends.   It is really 2 transactions,  you got a Dividend then you bought more shares.  Just like if they sent you a check and then you bought more shares. So be sure to add it to your cost basis when you sell the shares.