Hello, I am reposting this question because I found some additional info after my initial post. Please see below.
I converted my 401K into a rollover IRA in 2025, both are administered by the same brokerage company. My 401K had about 200 shares of the company stock of the place that I worked. Instead of having to convert the stocks into cash first and then deposited into the rollover IRA like the other mutual fund investments, they allowed these company stock shares to be transferred in the form of stock into the IRA. However, instead of a direct transfer from the 401K into the rollover IRA, this brokerage company used Computershare as the transfer agent, so the stocks were moved from my 401K to a Computershare account, then I had to request Computershare to move the stocks to the rollover IRA. In between the time of processing, the stocks paid a dividend and a check was sent to me, Pay To - "brokerage name" CUST FBO "my name" IRA. The brokerage company told me to endorse the check and mailed it to them to deposit into my rollover IRA, which they did put into my IRA. Now Computershare mailed a 1099DIV for the dividend amount to my address, and the 1099DIV shows the recipient’s name as, "name of brokerage" CUST FBO "my name" IRA. The 1099DIV also shows my social security number as recipient ID. Since the dividend check was deposited into my rollover IRA, and the payee is "name of brokerage" CUST FBO "my name" IRA, am I supposed to put it on my tax return as taxable dividend since I got the 1099DIV and it shows my social security number? If I report it on my tax return as dividend, I would be paying tax on this dividend distribution in 2025, and when I start taking money out of my IRA, this amount would be taxed again because the dividend was put into the rollover IRA as “tax-deferred”, so I would be paying taxes on this dividend twice. Computershare told me they were required to issue a 1099DIV, and they could not advise me what to do with the 1099DIV. The brokerage company issued a 1099R to me showing the money transferred from my 401K and the company stocks which Computershare transferred back to the brokerage company. The 1099R does not appear to include the dividend check amount. When I asked the brokerage company, I could not find a person to give me a sensible response.
What should I do with this 1099DIV? Please advise. Thank you.
