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Level 2
March 27, 2022
Question

Dividend taxes

  • March 27, 2022
  • 2 replies
  • 19 views

I am filing taxes for my 85 year old mother. Why does she have to pay taxes on Dividends reported from TD Ameritrade if she hasnt withdrawn any money? I understand that at some point when the money comes out of the account that taxes would be logical but she hasnt (in my mind) truly made any money until its withdrawn. Can you help me make sense of this?

    2 replies

    Level 10
    March 27, 2022

    She does not have to withdraw the dividend income from her brokerage account to be counted as taxable income. The dividends were credited to her account already, which were realized income and thus should be recognized as income. 

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    Alumni - Champ
    March 28, 2022