Taxation of dividend payments.
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New Member

Taxation of dividend payments.

In April of 2020, I purchased shares in an income producing mutual fund that pays dividends every month. In May I received a dividend & automatically had it reinvested. In total for 2020, I received 8 dividends with all reinvested. How will I be taxed?   Reg income?   What form should I expect to receive?  I understand my broker is usually not very prompt in putting these tax forms out.

2 Replies
Level 3

Taxation of dividend payments.

the reinvested dividends may be taxable.  you'll get a 1099-Div from the broker. yes, many brokers send these out late because they have to get info from the source as to the nature of the dividends - - non-qualified, qualified, return of capital, or long-term capital gain, do not file without this form.  if you do you likely have to amend 

Employee Tax Expert

Taxation of dividend payments.

You will see reinvested dividends on your brokerage report.  Report them as Dividend Income in the year you received them.  You may have also received a 1099-DIV form. 


Click this link for info on How to Report Dividend Income.


You will receive a 1099-B when you actually sell the shares. 


When you sell the shares, these dividends become part of the share's cost basis.


Click this link for more info on Reinvested Dividends.

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