Are reinvested dividends taxed twice, once when received and once when sold?

geezer78 · ‎June 6, 2019

IreneS · ‎June 6, 2019

Because there was an actual cash dividend, although reinvested, it is considered to be income and thus taxable. And, as with any stock, capital gains from shares held in a dividend reinvestment plan (DRIP) are not calculated and taxed until the stock is finally sold, usually several years down the road.

[Edited | 3/31/2020 | 9:50am PDT]

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View solution in original post

IreneS · ‎June 6, 2019

Because there was an actual cash dividend, although reinvested, it is considered to be income and thus taxable. And, as with any stock, capital gains from shares held in a dividend reinvestment plan (DRIP) are not calculated and taxed until the stock is finally sold, usually several years down the road.

[Edited | 3/31/2020 | 9:50am PDT]

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Are reinvested dividends taxed twice, once when received and once when sold?