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spreed21
New Member

Received both 1099B and 1099DIV forms and need to make sure we are not paying taxes twice

1099B form from sale of stock includes several long-term covered securities of both voluntary contributions (payroll deductions) and reinvested dividends, yet we received a 1099DIV form listing dollar amount of total ordinary dividends reinvested.  How should this be entered correctly to ensure we are not paying twice for taxes on gains from the sale of stock?
1 Reply
retiree
Level 7

Received both 1099B and 1099DIV forms and need to make sure we are not paying taxes twice

A 1099-DIV is sent (and must be filed) for ALL dividends received from a security --even if the dividends were re-invested and not physically received as cash.  As a result of re-investing you did in fact benefit financially from the dividends.  Dividend payments ARE taxed as income even if you do not actually receive a check but had the dividends reinvested in the investment;  since the reinvested dividends are indeed actually benefiting you by adding to the value of the investment --in other words you did received financial benefit from the reinvested dividends, just as if you received a check and spent it.

A 1099-B is not the same as a 1099-DIV. The 1099-B relates to the price you received when you sold the security versus the price you paid when you purchased the security, and thus determines if you have a loss or gain during the time you owned the security.


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