I have dividends that were reinvested in full. Why do I have to pay tax on these re-invested dividends, and will my funds be taxed again when I sell the stock?

[KarenJ]

Reinvested dividends are taxed when earned and then add to your cost basis in the investment for capital gains purposes.

For example, you invested $1,000 in a mutual fund and have earned and reinvested $50 in dividends. As a result, your cost basis is $1,050. If you sell all of your fund shares for $1,110, your taxable capital gain would be $60, not the $110 difference between what you originally paid for the fund shares and your selling value.  You need to keep track of every share.

Please find additional information here.  https://finance.zacks.com/pay-capital-gains-tax-only-sell-reinvested-dividends-2449.html

[crp44]

I have dividends that were reinvested Why do i have to pay tax on them until I have them in hand?

[Rick19744]

This is due to the fact that you did "technically" receive the dividends, however, you chose to reinvest them in purchasing additional stock instead of taking the cash.