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?

[VolvoGirl · Accepted solution]

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.