I have stock in NHP which pays dividends. I do not take them out but have them automatically purchase more stock with them. Do I have to pay income taxes on those?
2007-04-01 13:50:08 · 11 answers · asked by peekaboo 1 in Business & Finance ➔ Taxes ➔ United States
Yes, you still pay income tax on the dividends, whether you take them out or reinvest them.
If you reinvest them, add the amounts to the basis of the stock when you sell it.
2007-04-01 14:02:34 · answer #1 · answered by Judy 7 · 1⤊ 1⤋
Do they send you 1099DIV forms, if they do you have to pay tax. Generally they are taxable. The dividends that are paid and reinvested and taxed add to the basis you have in the stock. When the stock is sold, your basis is the amount you paid for the stock originally plus all dividends reinvested. You only pay tax then on the difference between the sales price and cost plus reinvested dividends.
2007-04-01 13:54:25 · answer #2 · answered by irongrama 6 · 0⤊ 0⤋
Yes, dividends are taxable whether you take them in cash or reinvest them. However, they are taxed at a lower rate for domestic corporations and mutual funds.
The dividends reinvested add to the basis of your stock. You will not be taxed again on that money.
2007-04-01 13:57:39 · answer #3 · answered by ninasgramma 7 · 1⤊ 0⤋
Yes, reinvested dividends are taxed as if you had received them in cash.
2007-04-01 15:33:20 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Yes
2007-04-01 13:53:14 · answer #5 · answered by mailjunkie123 3 · 0⤊ 0⤋
yes you do pay income tax on dividends
2007-04-01 14:08:10 · answer #6 · answered by Anonymous · 1⤊ 0⤋
Yes, I agree with the Highly Respected CPA above.
2007-04-01 13:56:49 · answer #7 · answered by rockEsquirrel 5 · 0⤊ 0⤋
Yes
go with the answer from the 10th most reputable CPA firm, thats good advice, and worth the price...
2007-04-01 15:08:48 · answer #8 · answered by Jo Blo 6 · 1⤊ 0⤋
Yes, follow the instructions on the 1099-DIV.
2007-04-01 13:58:33 · answer #9 · answered by Anonymous · 1⤊ 0⤋
Yes did they sned you a K-1 that show what you made? it is like a 1099 or w-2
2007-04-01 13:54:45 · answer #10 · answered by Anonymous · 0⤊ 2⤋