Taxation of dividend payments.

[cc4bs-45]

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.

[Mike9241]

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 

[MarilynG1]

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.